UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-42509

MICROSTRATEGY INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

51-0323571

(I.R.S. Employer

Identification Number)

1850 Towers Crescent Plaza, Tysons Corner, VA

(Address of Principal Executive Offices)

22182

(Zip Code)

(703) 848-8600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on which Registered
Class A common stock, $0.001 par value per share	MSTR	The Nasdaq Global Select Market
8.00% Series A Perpetual Strike Preferred Stock, $0.001 par value per share	STRK	The Nasdaq Global Select Market
10.00% Series A Perpetual Strife Preferred Stock, $0.001 par value per share	STRF	The Nasdaq Global Select Market
10.00% Series A Perpetual Stride Preferred Stock, $0.001 par value per share	STRD	The Nasdaq Global Select Market
Variable Rate Series A Perpetual Stretch Preferred Stock, $0.001 par value per share	STRC	The Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 31, 2025, the registrant had 263,912,697 and 19,640,250 shares of class A common stock and class B common stock outstanding, respectively.

MICROSTRATEGY INCORPORATED

FORM 10-Q

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (unaudited)	1
	Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024	1
	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024	2
	Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2025 and 2024	3
	Consolidated Statements of Mezzanine Equity and Stockholders’ Equity for the Three and Six Months Ended June 30, 2025	4
	Consolidated Statements of Mezzanine Equity and Stockholders’ Equity for the Three and Six Months Ended June 30, 2024	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	54
Item 4.	Controls and Procedures	54
PART II.	OTHER INFORMATION	56
Item 1.	Legal Proceedings	56
Item 1A.	Risk Factors	56
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	87
Item 5.	Other Information	88
Item 6.	Exhibits	89

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

MICROSTRATEGY INCORPORATED

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

	June 30,			December 31,
	2025			2024
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	50,095		$	38,117
Restricted cash		2,037			1,780
Accounts receivable, net		117,870			181,203
Prepaid expenses and other current assets		43,459			31,224
Total current assets		213,461			252,324
Digital assets		64,362,798			23,909,373
Property and equipment, net		30,203			26,327
Right-of-use assets		51,573			54,560
Deposits and other assets		109,664			75,794
Deferred tax assets, net		5,716			1,525,307
Total assets	$	64,773,415		$	25,843,685
Liabilities, Mezzanine Equity and Stockholders' Equity
Current liabilities:
Accounts payable, accrued expenses, and operating lease liabilities	$	44,220		$	52,982
Accrued compensation and employee benefits		50,132			58,362
Accrued interest		5,620			5,549
Current portion of long-term debt, net		349			517
Deferred revenue and advance payments		214,251			237,974
Total current liabilities		314,572			355,384
Long-term debt, net		8,162,281			7,191,158
Deferred revenue and advance payments		4,197			4,970
Operating lease liabilities		51,218			56,403
Other long-term liabilities		4,672			5,379
Deferred tax liabilities		5,865,510			407
Total liabilities		14,402,450			7,613,701
Commitments and Contingencies
Mezzanine Equity
8.00% Series A Perpetual Strike Preferred Stock, $0.001 par value; 269,800 shares authorized, 12,201 shares issued and outstanding at June 30, 2025; redemption value and liquidation preference of $1,220,137 at June 30, 2025		1,040,394			0
10.00% Series A Perpetual Strife Preferred Stock, $0.001 par value; 33,200 shares authorized, 10,067 shares issued and outstanding at June 30, 2025; redemption value and liquidation preference of $1,060,029 at June 30, 2025		874,041			0
10.00% Series A Perpetual Stride Preferred Stock, $0.001 par value; 11,765 shares authorized, 11,765 shares issued and outstanding at June 30, 2025; redemption value and liquidation preference of $1,176,470 at June 30, 2025		979,486			0
Total mezzanine equity		2,893,921			0
Stockholders’ Equity
Preferred stock undesignated, $0.001 par value; 690,235 and 5,000 shares authorized, no shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively		0			0
Class A common stock, $0.001 par value; 10,330,000 and 330,000 shares authorized, 261,318 and 226,138 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively		261			226
Class B common stock, $0.001 par value; 165,000 shares authorized, 19,640 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively		20			20
Additional paid-in capital		31,158,044			20,411,998
Accumulated other comprehensive loss		(5,020	)		(15,384	)
Retained earnings (accumulated deficit)		16,323,739			(2,166,876	)
Total stockholders’ equity		47,477,044			18,229,984
Total liabilities, mezzanine equity and stockholders' equity	$	64,773,415		$	25,843,685

The accompanying notes are an integral part of these Consolidated Financial Statements.

1

MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2025			2024			2025			2024
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues:
Product licenses	$	7,177		$	9,286		$	14,447		$	22,224
Subscription services		40,824			24,080			77,927			47,046
Total product licenses and subscription services		48,001			33,366			92,374			69,270
Product support		52,081			61,740			104,610			124,425
Other services		14,406			16,336			28,570			32,993
Total revenues		114,488			111,442			225,554			226,688
Cost of revenues:
Product licenses		1,169			794			2,133			1,361
Subscription services		15,906			9,560			30,335			18,164
Total product licenses and subscription services		17,075			10,354			32,468			19,525
Product support		7,291			8,193			14,645			16,740
Other services		11,384			12,388			22,608			24,685
Total cost of revenues		35,750			30,935			69,721			60,950
Gross profit		78,738			80,507			155,833			165,738
Operating expenses:
Sales and marketing		33,691			34,251			61,223			67,702
Research and development		24,071			30,311			48,494			59,494
General and administrative		36,500			36,129			77,047			70,795
Unrealized gain on digital assets		(14,047,514	)		0			(8,141,509	)		0
Digital asset impairment losses		0			180,090			0			371,723
Total operating expenses		(13,953,252	)		280,781			(7,954,745	)		569,714
Income (loss) from operations		14,031,990			(200,274	)		8,110,578			(403,976	)
Interest expense, net		(17,897	)		(15,466	)		(35,003	)		(27,347	)
Other (expense) income, net		(8,271	)		694			(12,207	)		2,390
Income (loss) before income taxes		14,005,822			(215,046	)		8,063,368			(428,933	)
Provision for (benefit from) income taxes		3,984,976			(112,487	)		2,259,892			(273,256	)
Net income (loss)		10,020,846			(102,559	)	$	5,803,476		$	(155,677	)
Dividends on preferred stock		(49,110	)		0			(58,347	)		0
Net income (loss) attributable to common stockholders of Strategy	$	9,971,736		$	(102,559	)	$	5,745,129		$	(155,677	)
Basic earnings (loss) per common share (1)	$	36.23		$	(0.57	)	$	21.61		$	(0.89	)
Weighted average common shares outstanding - Basic		275,244			178,607			265,910			175,326
Diluted earnings (loss) per common share (1)	$	32.60		$	(0.57	)	$	19.43		$	(0.89	)
Weighted average common shares outstanding - Diluted		306,764			178,607			298,039			175,326

(1) Basic and fully diluted earnings per common share for class A and class B common stock are the same.

The accompanying notes are an integral part of these Consolidated Financial Statements.

2

MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2025		2024			2025		2024
	(unaudited)		(unaudited)			(unaudited)		(unaudited)
Net income (loss)	$	10,020,846	$	(102,559	)	$	5,803,476	$	(155,677	)
Other comprehensive income (loss), net of applicable taxes:
Foreign currency translation adjustment		6,947		(381	)		10,364		(2,106	)
Total other comprehensive income (loss)		6,947		(381	)		10,364		(2,106	)
Comprehensive income (loss)	$	10,027,793	$	(102,940	)	$	5,813,840	$	(157,783	)

The accompanying notes are an integral part of these Consolidated Financial Statements.

3

MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025

(in thousands, unaudited)

	Mezzanine Equity				Stockholders' Equity
	Perpetual				Total			Class A				Class B Convertible				Additional		Accumulated Other			Retained Earnings
	Preferred Stock				Stockholders'			Common Stock				Common Stock				Paid-in		Comprehensive			(Accumulated
	Shares		Amount		Equity			Shares		Amount		Shares		Amount		Capital		Loss			Deficit)
Balance at January 1, 2025		0	$	0	$	18,229,984			226,138	$	226		19,640	$	20	$	20,411,998	$	(15,384	)	$	(2,166,876	)
Opening balance adjustment due to the adoption of ASU 2023-08, net of tax		0		0		12,746,378			0		0		0		0		0		0			12,746,378
Other		0		0		(1,097	)		0		0		0		0		0		0			(1,097	)
Net loss		0		0		(4,217,370	)		0		0		0		0		0		0			(4,217,370	)
Other comprehensive income		0		0		3,417			0		0		0		0		0		3,417			0
Preferred stock cash dividends declared		0		0		(9,188	)		0		0		0		0		0		0			(9,188	)
Issuance of class A common stock upon exercise of stock options		0		0		9,418			271		0		0		0		9,418		0			0
Issuance of class A common stock under employee stock purchase plan		0		0		2,703			26		0		0		0		2,703		0			0
Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes		0		0		0			104		0		0		0		0		0			0
Issuance of class A common stock under public offerings, net of issuance costs		0		0		4,399,205			12,625		13		0		0		4,399,192		0			0
Issuance of class A common stock upon conversions of convertible senior notes		0		0		1,045,132			7,373		8		0		0		1,045,124		0			0
Share-based compensation expense		0		0		12,654			0		0		0		0		12,654		0			0
Issuance of Series A Perpetual Strike Preferred Stock		7,650		593,624		0			0		0		0		0		0		0			0
Issuance of Series A Perpetual Strife Preferred Stock		8,500		710,873		0			0		0		0		0		0		0			0
Balance at March 31, 2025		16,150	$	1,304,497	$	32,221,236			246,537	$	247		19,640	$	20	$	25,881,089	$	(11,967	)	$	6,351,847
Net income		0		0		10,020,846			0		0		0		0		0		0			10,020,846
Other comprehensive income		0		0		6,947			0		0		0		0		0		6,947			0
Preferred stock cash dividends declared		0		0		(48,954	)		0		0		0		0		0		0			(48,954	)
Issuance of class A common stock upon exercise of stock options		0		0		12,451			325		0		0		0		12,451		0			0
Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes		0		0		0			230		0		0		0		0		0			0
Issuance of class A common stock under public offerings, net of issuance costs		0		0		5,248,692			14,225		14		0		0		5,248,678		0			0
Issuance of class A common stock upon conversions of convertible senior notes		0		0		84			1		0		0		0		84		0			0
Share-based compensation expense		0		0		15,742			0		0		0		0		15,742		0			0
Issuance of Series A Perpetual Strike Preferred Stock		4,551		446,770		0			0		0		0		0		0		0			0
Issuance of Series A Perpetual Strife Preferred Stock		1,567		163,168		0			0		0		0		0		0		0			0
Issuance of Series A Perpetual Stride Preferred Stock		11,765		979,486		0			0		0		0		0		0		0			0
Balance at June 30, 2025		34,033	$	2,893,921	$	47,477,044			261,318	$	261		19,640	$	20	$	31,158,044	$	(5,020	)	$	16,323,739

The accompanying notes are an integral part of these Consolidated Financial Statements.

4

MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024

(in thousands, unaudited)

	Mezzanine Equity				Stockholders' Equity
	Perpetual				Total			Class A				Class B Convertible				Additional									Accumulated Other			Retained Earnings
	Preferred Stock				Stockholders'			Common Stock				Common Stock				Paid-in			Treasury Stock						Comprehensive			(Accumulated
	Shares		Amount		Equity			Shares		Amount		Shares		Amount		Capital			Shares			Amount			Loss			Deficit)
Balance at January 1, 2024		0	$	0	$	2,164,972			157,725	$	24		19,640	$	2	$	3,957,728			(8,684	)	$	(782,104	)	$	(11,444	)	$	(999,234	)
Net loss		0		0		(53,118	)		0		0		0		0		0			0			0			0			(53,118	)
Other comprehensive loss		0		0		(1,725	)		0		0		0		0		0			0			0			(1,725	)		0
Issuance of class A common stock upon exercise of stock options		0		0		136,088			5,731		0		0		0		136,088			0			0			0			0
Issuance of class A common stock under employee stock purchase plan		0		0		2,071			69		0		0		0		2,071			0			0			0			0
Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes		0		0		(1,273	)		39		0		0		0		(1,273	)		0			0			0			0
Issuance of class A common stock under public offerings, net of issuance costs		0		0		137,152			1,952		0		0		0		137,152			0			0			0			0
Share-based compensation expense		0		0		15,938			0		0		0		0		15,938			0			0			0			0
Balance at March 31, 2024		0	$	0	$	2,400,105			165,516	$	24		19,640	$	2	$	4,247,704			(8,684	)	$	(782,104	)	$	(13,169	)	$	(1,052,352	)
Net loss		0		0		(102,559	)		0		0		0		0		0			0			0			0			(102,559	)
Other comprehensive loss		0		0		(381	)		0		0		0		0		0			0			0			(381	)		0
Issuance of class A common stock upon exercise of stock options		0		0		17,261			1,215		0		0		0		17,261			0			0			0			0
Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes		0		0		(932	)		311		0		0		0		(932	)		0			0			0			0
Issuance of class A common stock upon conversions of convertible senior notes		0		0		500,815			12,672		2		0		0		500,813			0			0			0			0
Share-based compensation expense		0		0		20,490			0		0		0		0		20,490			0			0			0			0
Balance at June 30, 2024		0	$	0	$	2,834,799			179,714	$	26		19,640	$	2	$	4,785,336			(8,684	)	$	(782,104.0	)	$	(13,550	)	$	(1,154,911	)

The accompanying notes are an integral part of these Consolidated Financial Statements.

5

MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Six Months Ended
	June 30,
	2025			2024
	(unaudited)			(unaudited)
Operating activities:
Net income (loss)	$	5,803,476		$	(155,677	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		15,693			6,701
Reduction in carrying amount of right-of-use assets		4,526			4,126
Deferred taxes		2,254,166			(278,140	)
Share-based compensation expense		27,561			38,412
Unrealized (gain) on digital assets		(8,141,509	)		0
Digital asset impairment losses		0			371,723
Amortization of issuance costs on long-term debt		12,445			6,399
Changes in operating assets and liabilities:
Accounts receivable		14,962			20,075
Prepaid expenses and other current assets		(16,029	)		7,914
Deposits and other assets		(2,429	)		(8,163	)
Accounts payable and accrued expenses		(3,250	)		(8,164	)
Accrued compensation and employee benefits		(28,187	)		(18,059	)
Accrued interest		71			3,641
Deferred revenue and advance payments		26,095			24,994
Operating lease liabilities		(5,308	)		(5,467	)
Other long-term liabilities		415			(5,057	)
Net cash (used in) provided by operating activities		(37,302	)		5,258
Investing activities:
Purchases of digital assets		(14,430,868	)		(2,433,137	)
Advance deposits on purchases of property and equipment		(22,000	)		0
Purchases of property and equipment		(4,831	)		(2,268	)
Net cash used in investing activities		(14,457,699	)		(2,435,405	)
Financing activities:
Proceeds from convertible senior notes		2,000,000			2,203,750
Issuance costs paid for convertible senior notes		(14,779	)		(42,008	)
Payments to settle conversions and redemption of convertible senior notes		(143	)		(44	)
Proceeds from other long-term secured debt, net of lender fees		16,000			0
Principal payments of other long-term secured debt		(282	)		(266	)
Proceeds from sale of preferred stock under public offerings		2,947,684			0
Issuance costs paid related to sale of preferred stock under public offerings		(56,372	)		0
Dividends paid on preferred stock		(58,142	)		0
Proceeds from sale of common stock under public offerings		9,663,697			137,765
Issuance costs paid related to sale of common stock under public offerings		(17,775	)		(613	)
Proceeds from exercise of stock options		21,869			153,349
Proceeds from sales under employee stock purchase plan		2,703			2,071
Payment of withholding tax on vesting of restricted stock units		0			(2,173	)
Net cash provided by financing activities		14,504,460			2,451,831
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash		2,776			(1,556	)
Net increase in cash, cash equivalents, and restricted cash		12,235			20,128
Cash, cash equivalents, and restricted cash, beginning of period		39,897			48,673
Cash, cash equivalents, and restricted cash, end of period	$	52,132		$	68,801

The accompanying notes are an integral part of these Consolidated Financial Statements.

6

MICROSTRATEGY INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(1) Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying Consolidated Financial Statements of MicroStrategy Incorporated d/b/a Strategy (“Strategy,” “MicroStrategy” or the “Company”) are unaudited. In the opinion of management, all adjustments necessary for a fair statement of financial position and results of operations have been included. All such adjustments are of a normal recurring nature, unless otherwise disclosed. Interim results are not necessarily indicative of results for a full year.

On July 11, 2024, the Company announced a 10-for-1 stock split of the Company’s class A common stock and class B common stock. The stock split was effected by means of a stock dividend to the holders of record of the Company’s class A common stock and class B common stock as of the close of business on August 1, 2024, the record date for the dividend. Shares held in treasury by the Company were not impacted by the stock split. The dividend was distributed after the close of trading on August 7, 2024 and trading commenced on a split-adjusted basis at market open on August 8, 2024. As a result of the stock split, all applicable share, per share, and equity award information has been retroactively adjusted in the Consolidated Financial Statements and Notes to Consolidated Financial Statements to reflect the stock split for all periods presented.

The Consolidated Financial Statements and Notes to Consolidated Financial Statements are presented as required by the United States Securities and Exchange Commission (“SEC”) and do not contain certain information included in the Company’s annual financial statements and notes. These financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto filed with the SEC in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. There have been no significant changes in the Company’s accounting policies since December 31, 2024, except as discussed below in (b) Digital Assets related to ASU 2023-08.

The accompanying Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

(b) Digital Assets

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires in-scope crypto assets (including the Company's bitcoin holdings) to be measured at fair value in the statement of financial position, with gains and losses from changes in the fair value of such crypto assets recognized in net income each reporting period. ASU 2023-08 also requires certain interim and annual disclosures for crypto assets within the scope of the standard. The Company adopted this guidance effective January 1, 2025 on a prospective basis, with a cumulative-effect adjustment to the opening balance of retained earnings. Prior periods were not restated. As a result, the Company’s financial results for the three and six months ended June 30, 2025 are not directly comparable to the financial results for earlier periods.

The adoption of ASU 2023-08 resulted in the following impacts as of January 1, 2025:

	December 31, 2024			Effect of the Adoption			January 1, 2025
Consolidated Balance Sheet	As Reported			of ASU 2023-08			As Adjusted
Digital assets	$	23,909,373		$	17,881,048		$	41,790,421
Deferred tax assets		1,525,307			(1,165,605	)		359,702
Deferred tax liabilities		407			3,969,065			3,969,472
(Accumulated deficit) retained earnings		(2,166,876	)		12,746,378			10,579,502

Although the Company continues to initially record its bitcoin purchases at cost, subsequent to the Company’s adoption of ASU 2023-08 on January 1, 2025, any increases or decreases in fair value are recognized as incurred in the Company's Consolidated Statements of Operations, and the fair value of the Company’s bitcoin is reflected within the Company's Consolidated Balance Sheets each reporting period-end. As a result of the adoption of ASU 2023-08, the Company no longer accounts for its bitcoin under a cost-less-impairment accounting model and no longer establishes a deferred tax asset related to bitcoin impairment losses. Instead, the Company establishes a deferred tax liability if the market value of bitcoin at the reporting date is greater than the average cost basis of the Company’s bitcoin holdings at such reporting date, and any subsequent increases or decreases in the market value of bitcoin increases or decreases the deferred tax liability. In determining the gain (loss) to be recognized upon sale, the Company calculates the difference between the sales price and carrying value of the specific bitcoin sold immediately prior to sale.

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The U.S. enacted the Inflation Reduction Act of 2022 (“IRA”) in August 2022. Among other things, unless an exemption by statute or regulation applies, a provision of the IRA imposes a 15% corporate alternative minimum tax (“CAMT”) on a corporation with respect to an initial tax year and subsequent tax years, if the average annual adjusted financial statement income (“AFSI”) for any consecutive three-tax-year period preceding the initial tax year exceeds $1 billion. On September 12, 2024, the Department of the Treasury and the Internal Revenue Service (the “IRS”) issued proposed regulations with respect to the application of the CAMT. For purposes of calculating the AFSI, the Company will be required to ratably allocate the increase to the Company’s retained earnings over a four year period, from 2025 through 2028. When determining whether the Company is subject to CAMT and when calculating any related tax liability for an applicable tax year, the proposed regulations provide that, among other adjustments, the Company’s AFSI must include this ratable amount in addition to any unrealized gains or losses reported in the applicable tax year. Accordingly, as a result of the enactment of the IRA and the Company’s adoption of ASU 2023-08 on January 1, 2025, unless the IRA is amended or the proposed regulations, when finalized, are revised to provide relief (or other interim relief is granted), the Company could become subject to CAMT in the tax years 2026 and beyond. If the Company becomes subject to the CAMT, it could result in a material tax obligation that the Company would need to satisfy in cash, which could materially affect its financial results, including its earnings and cash flow, and its financial condition.

(c) Redeemable Preferred Stock

As of June 30, 2025, the following series of preferred stock of the Company were outstanding: (i) 8.00% Series A Perpetual Strike Preferred Stock (“STRK Stock”), (ii) 10.00% Series A Perpetual Strife Preferred Stock (“STRF Stock”), and (iii) 10.00% Series A Perpetual Stride Preferred Stock (“STRD Stock”). In these Notes to Consolidated Financial Statements, STRK Stock, STRF Stock and STRD Stock are collectively referred to as “Preferred Stock.” In accordance with Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, each series of Preferred Stock outstanding as of June 30, 2025 is classified within mezzanine equity, as certain events that could cause shares of each such series of Preferred Stock to become redeemable are not solely within the control of the Company. In each case, the shares are initially recognized based on proceeds received, net of issuance costs, and are not accreted to their redemption value unless it becomes probable that the shares will become redeemable. Refer to Note 9, Redeemable Preferred Stock and Note 14, Subsequent Events for further discussion.

(d) Segment Reporting

The Company has adopted ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) for the year ended December 31, 2024, and for interim periods beginning January 1, 2025 as reflected in Note 12, Segment Information, to the Consolidated Financial Statements, including retroactive application to all prior periods presented. Refer to Note 3, Recent Accounting Pronouncements in the Company’s financial statements as of and for the year ended December 31, 2024 for further discussion.

(2) Recent Accounting Standards

Income Taxes

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires enhanced disclosures surrounding income taxes, particularly related to rate reconciliation and income taxes paid information. In particular, on an annual basis, companies will be required to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Companies will also be required to disclose, on an annual basis, the amount of income taxes paid, disaggregated by federal, state, and foreign taxes, and also disaggregated by individual jurisdictions above a quantitative threshold. The standard is effective for the Company for annual periods beginning January 1, 2025 on a prospective basis, with retrospective application permitted for all prior periods presented. The Company will adopt ASU 2023-09 for the annual period ending December 31, 2025 and is currently evaluating the impact of this guidance on its disclosures.

(3) Digital Assets

The Company accounts for its digital assets, which are comprised solely of bitcoin, as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other and ASU 2023-08. The Company’s digital assets are initially recorded at cost. Subsequent to the Company’s adoption of ASU 2023-08 on January 1, 2025, bitcoin assets are measured at fair value as of each reporting period. The Company determines the fair value of its bitcoin in accordance with ASC 820, Fair Value Measurement, based on quoted (unadjusted) prices on the Coinbase exchange, the active exchange that the Company has determined is its principal market for bitcoin (Level 1 inputs). Changes in fair value are recognized as incurred in the Company's Consolidated Statements of Operations, within “Unrealized loss on digital assets”, within operating expenses in the Company’s Consolidated Statement of Operations.

Prior to the adoption of ASU 2023-08, the Company’s digital assets were initially recorded at cost, and subsequently measured at cost, net of any impairment losses incurred since acquisition. Impairment losses were recognized as “Digital asset impairment losses” in the Company’s Consolidated Statement of Operations in the period in which the impairment occurred. Gains (if any) were not recorded until

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realized upon sale, at which point they were presented net of any impairment losses in the Company’s Consolidated Statements of Operations.

The following table summarizes the Company’s digital asset holdings (in thousands, except number of bitcoins), as of:

	June 30,		December 31,
	2025		2024
Approximate number of bitcoins held		597,325		447,470
Digital asset carrying value	$	64,362,798	$	23,909,373
Cumulative digital asset impairment losses	n/a		$	4,058,875

The carrying value on the Company’s Consolidated Balance Sheet at each period-end prior to the adoption of ASC 2023-08 represented the lowest fair value (based on Level 1 inputs in the fair value hierarchy) of the bitcoin at any time since their acquisition. Therefore, these fair value measurements were made during the period from their acquisition through December 31, 2024.

The following table summarizes the Company’s digital asset purchases, unrealized losses (gains) on digital assets as calculated after the adoption of ASU 2023-08 on January 1, 2025, and digital asset impairment losses as calculated prior to the adoption of ASU 2023-08 (in thousands, except number of bitcoins) for the periods indicated. The Company did not sell any of its bitcoins during the six months ended June 30, 2025 or 2024, respectively.

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2025			2024		2025			2024
Approximate number of bitcoins purchased		69,140			12,053		149,855			37,181
Digital asset purchases	$	6,769,205		$	793,828	$	14,430,868		$	2,433,137
Unrealized gain on digital assets	$	(14,047,514	)	n/a		$	(8,141,509	)	n/a
Digital asset impairment losses	n/a			$	180,090	n/a			$	371,723

From time to time, the Company’s execution partners may extend short-term credits to the Company to purchase bitcoin in advance of using cash funds in the Company’s trading account. Trade credits are due and payable after the bitcoin purchases are completed. In 2025, certain bitcoin of the Company and MacroStrategy LLC (“MacroStrategy”), a wholly-owned subsidiary of the Company, and in 2024, certain bitcoin of MacroStrategy, were subject to a first priority security interest and lien in order to secure payments owed by the Company with respect to these arrangements. While trade credits are outstanding, the Company may incur interest fees and be required to maintain minimum balances in its trading and custody accounts with such execution partners. As of June 30, 2025, the Company had no outstanding trade credits payable.

The vast majority of the Company’s assets are concentrated in its bitcoin holdings. Bitcoin is a digital asset, which is a novel asset class that is subject to significant legal, commercial, regulatory and technical uncertainty. Holding bitcoin does not generate any cash flows and involves custodial fees and other costs. Additionally, the price of bitcoin has historically experienced significant price volatility, and a significant decrease in the price of bitcoin would adversely affect the Company’s financial condition and results of operations. The Company’s strategy of acquiring and holding bitcoin also exposes it to counterparty risks with respect to the custody of its bitcoin, cybersecurity risks, and other risks inherent to holding a digital asset. In particular, the Company is subject to the risk that, if its private keys with respect to its digital assets are lost or destroyed or other similar circumstances or events occur, the Company may lose some or all of its digital assets, which could materially adversely affect the Company’s financial condition and results of operations.

(4) Contract Balances

The Company invoices its customers in accordance with billing schedules established in each contract. The Company’s rights to consideration from customers are presented separately in the Company’s Consolidated Balance Sheets depending on whether those rights are conditional or unconditional.

The Company presents unconditional rights to consideration from customers within “Accounts receivable, net” in its Consolidated Balance Sheets. All of the Company’s contracts are generally non-cancellable and/or non-refundable, and therefore an unconditional right generally exists when the customer is billed or amounts are billable per the contract.

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Accounts receivable (in thousands) consisted of the following, as of:

	June 30,			December 31,
	2025			2024
Billed and billable	$	120,818		$	183,391
Less: allowance for credit losses		(2,948	)		(2,188	)
Accounts receivable, net	$	117,870		$	181,203

Changes in the allowance for credit losses were not material for the three and six months ended June 30, 2025.

Rights to consideration that are subject to a condition other than the passage of time are considered contract assets until they are expected to become unconditional and transfer to accounts receivable. Current contract assets included in “Prepaid expenses and other current assets” in the Consolidated Balance Sheets consisted of $2.7 million and $2.6 million, as of June 30, 2025 and December 31, 2024, respectively, related to performance obligations or services being rendered in advance of future invoicing associated with multi-year contracts and accrued sales and usage-based royalty revenue. In royalty-based arrangements, consideration is not billed or billable until the royalty reporting is received, generally in the subsequent quarter, at which time the contract asset transfers to accounts receivable and a true-up adjustment is recorded to revenue. These true-up adjustments are generally not material. Non-current contract assets included in “Deposits and other assets” in the Consolidated Balance Sheets consisted of $10.4 million and $6.8 million, as of June 30, 2025 and December 31, 2024, respectively, related to performance obligations or services being rendered in advance of future invoicing associated with multi-year contracts. During the three and six months ended June 30, 2025 and 2024, there were no significant impairments to the Company’s contract assets, nor were there any significant changes in the timing of the Company’s contract assets being reclassified to accounts receivable.

Contract liabilities are amounts received or due from customers in advance of the Company transferring the software or services to the customer. In the case of multi-year service contract arrangements, the Company generally does not invoice more than one year in advance of services and does not record deferred revenue for amounts that have not been invoiced. Revenue is subsequently recognized in the period(s) in which control of the software or services is transferred to the customer. The Company’s contract liabilities are presented as either current or non-current “Deferred revenue and advance payments” in the Consolidated Balance Sheets, depending on whether the software or services are expected to be transferred to the customer within the next year.

The Company’s “Accounts receivable, net” and “Deferred revenue and advance payments” balances in the Consolidated Balance Sheets include unpaid amounts related to contracts under which the Company has an enforceable right to invoice the customer for non-cancellable and/or non-refundable software and services. Changes in accounts receivable and changes in deferred revenue and advance payments are presented net of these unpaid amounts in “Operating activities” in the Consolidated Statements of Cash Flows.

Deferred revenue and advance payments (in thousands) from customers consisted of the following, as of:

	June 30,		December 31,
	2025		2024
Current:
Deferred product licenses revenue	$	1,281	$	1,777
Deferred subscription services revenue		110,651		107,119
Deferred product support revenue		99,501		124,684
Deferred other services revenue		2,818		4,394
Total current deferred revenue and advance payments	$	214,251	$	237,974
Non-current:
Deferred product licenses revenue	$	133	$	174
Deferred subscription services revenue		913		2,263
Deferred product support revenue		2,878		2,111
Deferred other services revenue		273		422
Total non-current deferred revenue and advance payments	$	4,197	$	4,970

During the three and six months ended June 30, 2025, the Company recognized revenues of $71.5 million and $156.9 million, respectively, from amounts included in the total deferred revenue and advance payments balances at the beginning of 2025. During the three and six months ended June 30, 2024, the Company recognized revenues of $64.1 million and $145.0 million, respectively, from amounts included in the total deferred revenue and advance payments balances at the beginning of 2024. For the three and six months ended June 30, 2025 and 2024, there were no significant changes in the timing of revenue recognition on the Company’s deferred balances.

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The Company’s remaining performance obligation represents all future revenue under contract and includes deferred revenue and advance payments and billable non-cancellable amounts that will be invoiced and recognized as revenue in future periods. The remaining performance obligation excludes contracts that are billed in arrears, such as certain time and materials contracts. The portions of multi-year contracts that will be invoiced in the future are not presented on the balance sheet within accounts receivable and deferred revenues and are instead included in the following remaining performance obligation disclosure. As of June 30, 2025, the Company had an aggregate transaction price of $470.6 million allocated to the remaining performance obligation related to subscription services, product support, product licenses, and other services contracts. The Company expects to recognize $278.5 million within the next 12 months and the remainder thereafter.

(5) Long-term Debt

The net carrying value of the Company’s outstanding debt (in thousands) consisted of the following, as of:

	June 30, 2025		December 31, 2024
2027 Convertible Notes	$	0	$	1,041,352
2028 Convertible Notes		1,000,634		998,543
2029 Convertible Notes		2,978,675		2,975,037
2030A Convertible Notes		787,135		785,172
2030B Convertible Notes		1,986,614		0
2031 Convertible Notes		595,613		594,476
2032 Convertible Notes		788,756		787,417
Other long-term secured debt		25,203		9,678
Total	$	8,162,630	$	7,191,675
Reported as:
Current portion of long-term debt, net		349		517
Long-term debt, net		8,162,281		7,191,158
Total	$	8,162,630	$	7,191,675

Convertible Senior Notes

As of June 30, 2025, the following convertible notes were outstanding (the “Outstanding Convertible Notes”):

•$1.01 billion aggregate principal amount of 0.625% Convertible Senior Notes due 2028 (the “2028 Convertible Notes”);

•$3.00 billion aggregate principal amount of 0% Convertible Senior Notes due 2029 (the “2029 Convertible Notes”);

•$800.0 million aggregate principal amount of 0.625% Convertible Senior Notes due 2030 (the “2030A Convertible Notes”);

•$2.00 billion aggregate principal amount of 0% Convertible Senior Notes due 2030 (the “2030B Convertible Notes”);

•$603.7 million aggregate principal amount of 0.875% Convertible Senior Notes due 2031 (the “2031 Convertible Notes”); and

•$800.0 million aggregate principal amount of 2.25% Convertible Senior Notes due 2032 (the “2032 Convertible Notes”).

Additionally, the Company also previously issued, in February 2021, the $1.050 billion aggregate principal amount of 0% Convertible Senior Notes due 2027 (the “2027 Convertible Notes”, and together with the Outstanding Convertible Notes, the “Convertible Notes”), all of which were redeemed or converted into the Company’s class A common stock during the first quarter of 2025.

Each of the Convertible Notes were issued in a private offering. The Outstanding Convertible Notes are, and the 2027 Convertible Notes were, senior unsecured obligations of the Company ranking senior in right of payment to any of the Company’s indebtedness expressly subordinated in right of payment to the Convertible Notes; equal in right of payment to any of the Company’s unsecured indebtedness not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries.

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The following table summarizes the key terms of each of the Convertible Notes (principal at inception, net proceeds, and issuance costs are each reported in thousands):

	2027 Convertible Notes			2028 Convertible Notes			2029 Convertible Notes			2030A Convertible Notes			2030B Convertible Notes			2031 Convertible Notes			2032 Convertible Notes
Issuance Date	February 2021			September 2024			November 2024			March 2024			February 2025			March 2024			June 2024
Maturity Date (1)	February 15, 2027			September 15, 2028			December 1, 2029			March 15, 2030			March 1, 2030			March 15, 2031			June 15, 2032
Principal at Inception	$	1,050,000		$	1,010,000		$	3,000,000		$	800,000		$	2,000,000		$	603,750		$	800,000
Stated Interest Rate (2)		0.000	%		0.625	%		0.000	%		0.625	%		0.000	%		0.875	%		2.250	%
Interest Payment Dates (3)	February 15 & August 15			March 15 & September 15			June 1 & December 1			March 15 & September 15			March 1 & September 1			March 15 & September 15			June 15 & December 15
Net Proceeds	$	1,025,830		$	997,375		$	2,974,250		$	782,000		$	1,984,852		$	592,567		$	786,000
Issuance Costs (4)	$	24,170		$	12,625		$	25,750		$	18,000		$	15,148		$	11,183		$	14,000
Effective Interest Rate (4)		0.39	%		1.05	%		0.24	%		1.14	%		0.25	%		1.30	%		2.63	%
Date of Holder Put Option (5)	n/a			September 15, 2027			June 1, 2028			September 15, 2028			March 1, 2028			September 15, 2028			June 15, 2029
Initial Conversion Rate (6)		6.981			5.4589			1.4872			6.677			2.3072			4.297			4.894
Initial Conversion Price (7)	$	143.25		$	183.19		$	672.40		$	149.77		$	433.43		$	232.72		$	204.33
Convertible at any time after the following date (8) (9)	January 24, 2025			March 15, 2028			June 1, 2029			September 15, 2029			December 3, 2029			September 15, 2030			December 15, 2031
Not redeemable by the Company prior to the following date (10)	February 20, 2024			December 20, 2027			December 4, 2026			March 22, 2027			March 5, 2027			March 22, 2028			June 20, 2029
Redemption Date (11)	February 24, 2025			n/a			n/a			n/a			n/a			n/a			n/a

(1)“Maturity Date” is the stated maturity date under each applicable indenture governing such notes, unless earlier converted, redeemed, or repurchased in accordance with their terms.

(2)Holders may receive additional or special interest under specified circumstances as outlined under each applicable indenture governing the Convertible Notes.

(3)The 2029 Convertible Notes and the 2030B Convertible Notes do not bear regular interest. Additionally, the 2027 Convertible Notes did not bear regular interest prior to their redemption.

(4)“Issuance Costs” reflect the customary offering expenses associated with each of the Convertible Notes. The Company accounts for these issuance costs as a reduction to the principal amount of the respective Convertible Notes and amortizes the issuance costs to interest expense from the respective debt issuance dates through the earlier of the “Maturity Date” or the “Date of Holder Put Option,” if applicable, at the “Effective Interest Rate” stated in the table.

(5)“Date of Holder Put Option” represents the respective dates upon which holders of the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2030B Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes each have a noncontingent right to require the Company to repurchase for cash all or any portion of their respective notes at a repurchase price equal to 100% of the principal amount of such notes to be repurchased, plus any accrued and unpaid interest to, but excluding the repurchase date.

(6)The “Initial Conversion Rate” is stated in shares of the Company’s class A common stock per $1,000 principal amount. The conversion rates are subject to customary anti-dilution adjustments. In addition, following certain events that may occur prior to the respective maturity dates or if the Company delivers a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its respective Convertible Notes in connection with such corporate event or notice of redemption, as the case may be, in certain circumstances as provided in each indenture governing the respective Convertible Notes.

(7)The “Initial Conversion Price” is stated in dollars per share of the Company’s class A common stock.

(8)On or after the stated dates until the close of business on the second scheduled trading day immediately preceding the respective maturity dates, holders may convert the Convertible Notes at any time. Upon conversion of the Convertible Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s class A common stock, or a combination of cash and shares of class

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A common stock, at the Company’s election. For the 2027 Convertible Notes, the date presented is the date on which the Company delivered its notice of full redemption of the 2027 Convertible Notes, which resulted in the 2027 Convertible Notes being convertible at any time thereafter until 5:00pm New York City time, on February 20, 2025. See below under “Conversions and Redemption of Convertible Notes” for further information.

(9)Prior to the respective dates, the Convertible Notes are convertible only under the following circumstances:

i.during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ended on June 30, 2024 for the 2030A Convertible Notes and 2031 Convertible Notes, on September 30, 2024 for the 2032 Convertible Notes, on December 31, 2024 for the 2028 Convertible Notes, on March 31, 2025 for the 2029 Convertible Notes, or on June 30, 2025 for the 2030B Convertible Notes, if the last reported sale price of the Company’s class A common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the respective Convertible Notes on each applicable trading day;

ii.during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined under each applicable indenture governing the respective Convertible Notes) per $1,000 principal amount of the respective Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s class A common stock and the applicable conversion rate on each such trading day;

iii.(a) in the case of the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes and 2032 Convertible Notes, the Company calls any or all of such Convertible Notes for redemption, then a holder may surrender all or any part of such of its Convertible Notes as called for redemption for conversion at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; and (b) in the case of the 2030B Convertible Notes, the Company calls any 2030B Convertible Notes for redemption, then the holders of such 2030B Convertible Note may convert such 2030B Convertible Notes at any time before the close of business on the second business day immediately before the related redemption date; and

iv.upon occurrence of specified corporate events as described in each applicable indenture governing the respective Convertible Notes.

(10)The Company may redeem for cash all or a portion of the Outstanding Convertible Notes at its option, on or after the stated dates, if the last reported sale price of the Company’s class A common stock has been at least 130% of the conversion price of the respective Convertible Notes then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides a notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will be equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. See below “Conversions and Redemption of Convertible Notes” subsection for information regarding the Company’s redemption of the 2027 Convertible Notes.

(11)“Redemption Date” for the 2027 Convertible Notes is the date on which the Company redeemed all outstanding 2027 Convertible Notes.

If the Company undergoes a “fundamental change,” as defined in the respective indentures governing the Convertible Notes prior to maturity, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their respective Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the respective Convertible Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The respective indentures governing the Convertible Notes contain customary terms and covenants, including that upon certain events of default occurring and continuing, either the applicable trustee of the respective Convertible Notes or the holders of at least 25% in principal amount outstanding of the respective Convertible Notes may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the respective Convertible Notes to be due and payable.

Although the Convertible Notes contain embedded conversion features, the Company accounts for the Convertible Notes in their entirety as a liability because the conversion features are indexed to the Company’s class A common stock and meet the criteria for classification in stockholders’ equity and therefore do not qualify for separate derivative accounting.

Conversions and Redemption of Convertible Notes

On January 24, 2025, the Company delivered a notice of full redemption to the trustee of the Company’s 2027 Convertible Notes for the redemption of all $1.05 billion in aggregate principal amount of the 2027 Convertible Notes then outstanding on February 24, 2025 (the “2027 Redemption Date”), at a redemption price equal to 100% of the principal amount of the 2027 Convertible Notes to be redeemed, plus accrued and unpaid special interest, if any, to but excluding the 2027 Redemption Date, unless earlier converted. The Company elected to satisfy its conversion obligation with respect to the 2027 Convertible Notes by delivering solely shares of its class A common stock, together with cash in lieu of any fractional shares. Holders of the 2027 Convertible Notes requested to convert $1.050 billion in

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principal amount of the 2027 Convertible Notes for which the Company issued 7,373,528 shares of the Company’s class A common stock and paid a nominal amount of cash in lieu of fraction shares upon settlement of such conversion requests, in accordance with the terms and provisions of the indenture governing the 2027 Convertible Notes.

During the three months ended March 31, 2025, the Company received from certain holders of the 2031 Convertible Notes requests to convert an immaterial principal amount of the 2031 Convertible Notes, which the Company settled in shares of class A common stock and cash in accordance with the terms and provisions of the indenture governing the 2031 Convertible Notes. The settlement was effected during the three months ended June 30, 2025. No shares of class A common stock were issued in respect of such conversions during the three months ended March 31, 2025.

During the three months ended June 30, 2024, the Company settled conversion requests in respect of $504.4 million in principal amount of the Company’s 0.750% Convertible Senior Notes due 2025 (the “2025 Convertible Notes”) resulting in the issuance of 12,672,400 shares of the Company’s class A common stock and payment of a nominal amount of cash in lieu of fractional shares in accordance with the terms and provisions of the indenture governing the 2025 Convertible Notes. All unconverted 2025 Convertible Notes outstanding as of June 30, 2024 were redeemed or converted into the Company’s class A common stock in the third quarter of 2024 and were not outstanding as of December 31, 2024 or June 30, 2025.

Collective Convertible Notes Disclosures

As of June 30, 2025, the maximum number of shares into which the Outstanding Convertible Notes could have been potentially converted if the conversion features were triggered at the conversion rates then in effect based on the Outstanding Convertible Notes then outstanding on such date was:

•2028 Convertible Notes: 5,513,489 shares of class A common stock;

•2029 Convertible Notes: 4,461,600 shares of class A common stock;

•2030A Convertible Notes: 5,341,600 shares of class A common stock;

•2030B Convertible Notes: 4,614,400 shares of class A common stock;

•2031 Convertible Notes: 2,593,931 shares of class A common stock; and

•2032 Convertible Notes: 3,915,200 shares of class A common stock.

The 2028 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes and 2032 Convertible Notes were convertible at the option of the holders during the three ended March 31, 2025. In addition, the 2027 Convertible Notes were convertible at the option of the holders during the three months ended March, 31, 2025 prior to their redemption. The 2028 Convertible Notes, 2030A Convertible Notes and 2032 Convertible Notes were convertible at the option of the holders during the three months ended June 30, 2025. The Outstanding Convertible Notes may be convertible in future periods if one or more of the conversion conditions is satisfied during future measurement periods. As of June 30, 2025, the last reported sale price of the Company’s class A common stock for at least 20 trading days during the 30 consecutive trading days ending on, and including, June 30, 2025 was greater than or equal to 130% of the conversion price of each of the 2028 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes and 2032 Convertible Notes on each applicable trading day. Therefore, the 2028 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes and 2032 Convertible Notes are convertible at the option of the holders of the respective Convertible Notes during the third quarter of 2025.

The Company did not receive conversion requests with respect to the Convertible Notes during the three and six months ended June 30, 2025 and 2024, except as described above under “Conversions and Redemption of Convertible Notes”.

As of June 30, 2025, and December 31, 2024, the net carrying value of the Convertible Notes was classified as a long-term liability in the “Long-term debt, net” line item in the Company’s Consolidated Balance Sheets.

The following is a summary of the Company’s Outstanding Convertible Notes outstanding as of June 30, 2025 (in thousands):

	June 30, 2025
	Outstanding		Unamortized			Net Carrying		Fair Value
	Principal Amount		Issuance Costs			Value		Amount		Leveling
2028 Convertible Notes	$	1,010,000	$	(9,366	)	$	1,000,634	$	2,356,465	Level 2
2029 Convertible Notes		3,000,000		(21,325	)		2,978,675		2,826,180	Level 2
2030A Convertible Notes		800,000		(12,865	)		787,135		2,212,718	Level 2
2030B Convertible Notes		2,000,000		(13,386	)		1,986,614		1,143,397	Level 2
2031 Convertible Notes		603,661		(8,048	)		595,613		1,587,442	Level 2
2032 Convertible Notes		800,000		(11,244	)		788,756		2,347,154	Level 2
Total	$	8,213,661	$	(76,234	)	$	8,137,427	$	12,473,356

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The following is a summary of the Company’s Convertible Notes outstanding as of December 31, 2024 (in thousands):

	December 31, 2024
	Outstanding		Unamortized			Net Carrying		Fair Value
	Principal Amount		Issuance Costs			Value		Amount		Leveling
2027 Convertible Notes	$	1,050,000	$	(8,648	)	$	1,041,352	$	2,134,125	Level 2
2028 Convertible Notes		1,010,000		(11,457	)		998,543		1,927,828	Level 2
2029 Convertible Notes		3,000,000		(24,963	)		2,975,037		2,447,682	Level 2
2030A Convertible Notes		800,000		(14,828	)		785,172		1,657,323	Level 2
2031 Convertible Notes		603,750		(9,274	)		594,476		877,559	Level 2
2032 Convertible Notes		800,000		(12,583	)		787,417		1,324,602	Level 2
Total	$	7,263,750	$	(81,753	)	$	7,181,997	$	10,369,119

The fair value of the Convertible Notes is determined using observable market data other than quoted prices, specifically the last traded price at the end of the reporting period of identical instruments in the over-the-counter market (Level 2).

For the three months ended June 30, 2025 and 2024, interest expense related to the Convertible Notes (including the 2025 Convertible Notes) was as follows (in thousands):

	Three Months Ended June 30, 2025						Three Months Ended June 30, 2024
	Contractual		Amortization of				Contractual		Amortization of
	Interest Expense		Issuance Costs		Total		Interest Expense		Issuance Costs		Total
2025 Convertible Notes	$	0	$	0	$	0	$	1,129	$	712	$	1,841
2027 Convertible Notes		0		0		0		0		1,011		1,011
2028 Convertible Notes		1,578		1,047		2,625		0		0		0
2029 Convertible Notes		0		1,819		1,819		0		0		0
2030A Convertible Notes		1,250		983		2,233		1,250		972		2,222
2030B Convertible Notes		0		1,249		1,249		0		0		0
2031 Convertible Notes		1,320		614		1,934		1,321		603		1,924
2032 Convertible Notes		4,500		671		5,171		650		95		745
Total	$	8,648	$	6,383	$	15,031	$	4,350	$	3,393	$	7,743

For the six months ended June 30, 2025 and 2024, interest expense related to the Convertible Notes (including the 2025 Convertible Notes) was as follows (in thousands):

	Six Months Ended June 30, 2025						Six Months Ended June 30, 2024
	Contractual		Amortization of				Contractual		Amortization of
	Interest Expense		Issuance Costs		Total		Interest Expense		Issuance Costs		Total
2025 Convertible Notes	$	0	$	0	$	0	$	2,348	$	1,479	$	3,827
2027 Convertible Notes		0		401		401		0		2,021		2,021
2028 Convertible Notes		3,156		2,091		5,247		0		0		0
2029 Convertible Notes		0		3,637		3,637		0		0		0
2030A Convertible Notes		2,500		1,963		4,463		1,569		1,220		2,789
2030B Convertible Notes		0		1,762		1,762		0		0		0
2031 Convertible Notes		2,641		1,225		3,866		1,512		692		2,204
2032 Convertible Notes		9,000		1,339		10,339		650		95		745
Total	$	17,297	$	12,418	$	29,715	$	6,079	$	5,507	$	11,586

For the three and six months ended June 30, 2025, the Company paid $9.0 million and $17.2 million, respectively, in interest related to the Convertible Notes. For the six months ended June 30, 2024, the Company paid $2.4 million in interest related to the 2025 Convertible Notes. The Company has not paid any additional interest or special interest related to the Convertible Notes to date.

Senior Secured Notes

On June 14, 2021, the Company issued $500 million aggregate principal amount of 6.125% Senior Secured Notes due 2028 (the “2028 Secured Notes”) in a private offering. These notes, which were guaranteed by MicroStrategy Services Corporation, a wholly owned

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subsidiary of the Company (the “Subsidiary Guarantor”), bore a fixed interest rate of 6.125% per annum, payable semiannually, with a maturity date of June 15, 2028, unless earlier redeemed or repurchased in accordance with their terms and subject to a springing maturity feature described in the indenture governing the 2028 Secured Notes. The 2028 Secured Notes were secured by a first priority security interest in the Company's and the Subsidiary Guarantor’s assets, including bitcoins acquired by the Company or the Subsidiary Guarantor after June 14, 2021. The Company redeemed all 2028 Secured Notes on September 26, 2024, at a redemption price equal to $523.9 million, and all collateral securing the 2028 Secured Notes was released. For additional information about the 2028 Secured Notes, see Note 8 to the Company’s Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

For the three and six months ended June 30, 2024, interest expense related to the 2028 Secured Notes was as follows (in thousands):

	Three Months Ended June 30, 2024						Six Months Ended June 30, 2024
	Contractual		Amortization of				Contractual		Amortization of
	Interest Expense		Issuance Costs		Total		Interest Expense		Issuance Costs		Total
2028 Secured Notes	$	7,657	$	435	$	8,092	$	15,313	$	864	$	16,177

For the three months ended June 30, 2024, the Company paid $7.7 million in interest related to the 2028 Secured Notes, and for the six months ended June 30, 2024, the Company paid $15.3 million in interest related to the 2028 Secured Notes.

Other long-term secured debt

In June 2022, the Company, through a wholly-owned subsidiary, entered into a secured term loan agreement in the amount of $11.1 million, bearing interest at an annual rate of 5.2%, and maturing in June 2027. The loan is secured by certain non-bitcoin assets of the Company that are not otherwise serving as collateral for any of the Company’s other indebtedness.

Additionally, during the three months ended June 30, 2025, the Company entered into a loan agreement that provides for aggregate borrowings of up to $31.1 million, available in multiple tranches and bearing interest, with respect to each tranche, at a variable rate equal to the one-year Secured Overnight Financing Rate plus 4.24%. The loan was made to fund a capital asset purchase and is secured by non-bitcoin assets that will not otherwise serve as collateral for any of the Company’s other indebtedness. The loan will mature in December 2026.

After monthly payments made under the terms of these other long-term secured debt agreements, the other long-term secured debt had an aggregate net carrying value of $25.2 million and $9.7 million as of June 30, 2025 and December 31, 2024, respectively, and an aggregate outstanding principal balance of $25.6 million and $9.8 million as of June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025 and December 31, 2024, $0.3 million and $0.5 million of the respective net carrying values were short-term and were presented in “Current portion of long-term debt, net” in the Consolidated Balance Sheets.

Maturities

The following table shows the maturities of the Company’s debt instruments outstanding as of June 30, 2025 (in thousands). The principal payments related to the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2030B Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes are included in the table below as if the holders exercised their right to require the Company to repurchase all of the respective convertible notes on their respective Date of Holder Put Option.

Payments due by period ended June 30,	2028 Convertible Notes		2029 Convertible Notes		2030A Convertible Notes		2030B Convertible Notes		2031 Convertible Notes		2032 Convertible Notes		Other long-term secured debt		Total
2026	$	0	$	0	$	0	$	0	$	0	$	0	$	585	$	585
2027		0		0		0		0		0		0		25,006		25,006
2028		1,010,000		3,000,000		0		2,000,000		0		0		0		6,010,000
2029		0		0		800,000				603,661		800,000		0		2,203,661
2030		0		0		0		0		0		0		0		0
Thereafter		0		0		0		0		0		0		0		0
Total	$	1,010,000	$	3,000,000	$	800,000	$	2,000,000	$	603,661	$	800,000	$	25,591	$	8,239,252

(6) Commitments and Contingencies

(a) Commitments

From time to time, the Company enters into certain types of contracts that require it to indemnify parties against third-party claims. These contracts primarily relate to agreements under which the Company assumes indemnity obligations for intellectual property infringement or death, bodily harm, or damage to tangible personal property due to the Company’s personnel's gross negligence or willful misconduct

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in providing contracted services, as well as other obligations from time to time depending on arrangements negotiated with customers and other third parties. The conditions of these obligations vary. Thus, the overall maximum amount of the Company’s indemnification obligations cannot be reasonably estimated. Historically, the Company has not been obligated to make significant payments for these obligations and does not currently expect to incur any material obligations in the future. Accordingly, the Company has not recorded an indemnification liability on its Consolidated Balance Sheets as of June 30, 2025 or December 31, 2024.

(b) Contingencies

Brazil Matter

Following an internal review initiated in 2018, the Company disclosed its belief that its Brazilian subsidiary failed or likely failed to comply with local procurement regulations in conducting business with certain Brazilian government entities.

In 2020 the Company learned that the Brazilian Federal Police were investigating alleged corruption and procurement fraud involving certain government officials, including a transaction that was part of the basis of the Company’s previously reported failure or likely failure of its Brazilian subsidiary to comply with local procurement regulations. To the best of the Company’s knowledge, this investigation was concluded in 2023. Neither employees of the Company’s Brazilian subsidiary nor the subsidiary itself were targets of the Federal Police investigation.

The Company’s Brazilian subsidiary voluntarily disclosed information from its 2018 internal review to Brazil’s General Superintendence of the Administrative Council for Economic Defense (“SG/CADE”), the Federal Comptroller General (“CGU”), and the Office of the Comptroller General of the State of São Paulo (“CGE-SP”). Following this voluntary disclosure and cooperation with these agencies, the Company’s Brazilian subsidiary signed leniency agreements with the SG/CADE in September 2020, with the CGU and the Federal General Attorney’s Office (“AGU”) in July 2024, and with the CGE-SP and the Office of the Attorney General of the State of São Paulo (“PGE-SP”) in April 2025.

In 2023, the SG/CADE launched a public administrative proceeding to investigate potentially anticompetitive conduct by various entities and individuals in Brazil based in part on the information voluntarily disclosed by the Company’s Brazilian subsidiary, which is also one of the defendants in the proceeding. If at the end of the proceeding, SG/CADE’s Tribunal confirms that the Brazilian subsidiary’s obligations under the leniency agreement it signed with SG/CADE have been fulfilled, the Brazilian subsidiary will receive full immunity from fines.

Pursuant to its leniency agreement with the CGU and the AGU, the Brazilian subsidiary (i) paid approximately BRL 6.16 million (equivalent to approximately $1.1 million) in July 2024, (ii) agreed to certain undertakings regarding its compliance program, and (iii) has been granted immunity from debarment and other sanctions. As a result of this leniency agreement, the CGU dismissed its pending administrative action against the Brazilian subsidiary over alleged procurement violations.

Pursuant to its leniency agreement with the CGE-SP and PGE-SP, the Brazilian subsidiary (i) paid approximately BRL 2.38 million (equivalent to approximately $406,000) in April 2025, and (ii) has been granted immunity from debarment and other sanctions.

The Company’s Brazilian subsidiary continues to cooperate with requests from government authorities related to the above matters. As of June 30, 2025, the Company remained unable to reasonably estimate a range of loss beyond the 2024 third quarter payment and April 2025 payment described above.

Shareholder and Derivative Actions

Hamza Securities Action. On May 16, 2025, Anas Hamza filed a purported class action lawsuit in the U.S. District Court for the Eastern District of Virginia against the Company, Michael J. Saylor, Phong Q. Le, and Andrew Kang, alleging violations of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 thereunder, and Section 20(a) of the Exchange Act. Plaintiff Hamza purports to assert claims on behalf of a purported class of investors, for a period running from April 30, 2024 to April 4, 2025, alleging that the named defendants made false and/or misleading statements with respect to and/or failed to disclose information with respect to the anticipated profitability of the Company’s bitcoin-focused investment strategy and treasury operations, and the various risks associated with bitcoin’s volatility and the magnitude of the losses the Company could recognize following its adoption of ASU 2023-08. The complaint seeks unspecified damages to the class, interest, attorneys’ fees, costs, and other relief. The Company intends to vigorously defend against these claims. At this time, the Company cannot predict the outcome, or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter.

Parmar Derivative Action. On June 19, 2025, Abhey Parmar filed a shareholder derivative lawsuit in the U.S. District Court for the Eastern District of Virginia against the Company’s officers and/or directors Michael J. Saylor, Phong Q. Le, Stephen X. Graham, Andrew Kang, Jarrod M. Patten, Carl J. Rickertsen, and former director Leslie J. Rechan, and against the Company as nominal defendant. Plaintiff Parmar purports to assert claims on behalf of the Company against the individual defendants for breaches of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, waste, and contribution. The complaint makes claims based on factual allegations similar to those asserted in the Hamza securities action described above, namely that the individual defendants caused or allowed the Company to make false or misleading disclosures or omissions, and failed to correct such false or misleading disclosures or omissions, concerning the risks and financial impact associated with the Company’s adoption of ASU 2023-08, the risks associated with bitcoin’s volatility, and the

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profitability of the Company’s bitcoin-driven strategy and treasury operations. The complaint also alleges the individual defendants caused the Company to fail to maintain adequate internal controls, and that Messrs. Le, Kang, Graham, and Rechan allegedly engaged in insider selling because they sold shares of the Company’s stock at various times from April 30, 2024 to April 4, 2025. The complaint seeks damages against the individual defendants on behalf of the Company, the imposition of certain corporate governance and internal procedures changes by the Company, restitution from the individual defendants, attorneys’ fees, costs, and other relief. The Company intends to vigorously defend against these claims. At this time, the Company cannot predict the outcome, or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter.

Chen Derivative Action. On June 25, 2025, Zhenqiu Chen filed a shareholder derivative lawsuit in the U.S. District Court for the Eastern District of Virginia against the Company’s officers and/or directors Michael J. Saylor, Phong Q. Le, Andrew Kang, Brian P. Brooks, Jane A. Dietze, Jarrod M. Patten, Stephen X. Graham, Carl J. Rickertsen, Gregg J. Winiarski, and former director Leslie J. Rechan, and against the Company as nominal defendant. Plaintiff Chen purports to assert claims on behalf of the Company against the individual defendants for breaches of fiduciary duties, aiding and abetting breaches of fiduciary duties, unjust enrichment, waste, and contribution. The complaint makes claims based on factual allegations similar to those asserted in the Hamza securities action and the Parmar derivative action described above, namely that the individual defendants caused or allowed the Company to make false or misleading disclosures or omissions, and failed to correct such false or misleading disclosures or omissions, concerning the risks and financial impact associated with the Company’s adoption of ASU 2023-08, the risks associated with bitcoin’s volatility, and the profitability of the Company’s bitcoin-driven strategy and treasury operations. The complaint also alleges the individual defendants caused the Company to fail to maintain adequate internal controls, and that Messrs. Le, Kang, Graham, and Rechan allegedly engaged in insider selling because they sold shares of the Company’s stock at various times from April 30, 2024 to April 4, 2025. The complaint seeks money damages against the individual defendants, imposition of a constructive trust on damages allegedly caused and benefits allegedly received by the individual defendants as a result of their disputed conduct, punitive damages, attorneys’ fees, costs, and other relief. The Company intends to vigorously defend against these claims. At this time, the Company cannot predict the outcome, or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter.

Dodge Class Action. On July 21, 2025, David Dodge filed a purported class action lawsuit in the Court of Chancery of the State of Delaware against the Company and the Company’s board of directors alleging violations of the Delaware General Corporation Law (the “DGCL”), and asserting a claim against the Company’s board of directors for breach of fiduciary duty in connection with the purported DGCL violation. Plaintiff Dodge purports to assert claims on behalf of himself and similarly situated holders of the Company’s common stock alleging that pursuant to Section 242 of the DGCL (“Section 242”), the holders of the Company’s common stock were entitled to vote on the STRK Amendment (as defined in Note 14, Subsequent Events) the Company filed on July 7, 2025 with the Secretary of State of the State of Delaware. Refer to Note 14, Subsequent Events, for additional information on the STRK Amendment. Plaintiff Dodge seeks, among other things, an order (i) finding, determining and declaring that the Company violated Section 242; (ii) finding, determining and declaring that the board of directors has breached its fiduciary duties; (iii) deeming the STRK Amendment ineffective and requiring that the Company file a certificate of correction with the Delaware Secretary of State invalidating the STRK Amendment; (iv) awarding unspecified damages to Plaintiff Dodge and the class, including interest; (v) awarding attorneys’ fees and costs; and (vi) granting other relief. At this time, the Company cannot predict the outcome or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in these matters.

Various Legal Proceedings and Contingent Liabilities

The Company is also involved in various legal proceedings arising in the normal course of business. Although the outcomes of these legal proceedings are inherently difficult to predict, management does not expect the resolution of these legal proceedings to have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

The Company has contingent liabilities that, in management’s judgment, are not probable of assertion. If such unasserted contingent liabilities were to be asserted, or become probable of assertion, the Company may be required to record significant expenses and liabilities in the period in which these liabilities are asserted or become probable of assertion.

(7) Income Taxes

The Company computes its year-to-date provision for (benefit from) income taxes by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusts the provision for (benefit from) income taxes for discrete tax items recorded in the period. The estimated effective tax rate is subject to fluctuation based on the level and mix of earnings and losses by tax jurisdiction, foreign tax rate differentials, and the relative impact of permanent book to tax differences. Each quarter, a cumulative adjustment is recorded for any fluctuations in the estimated annual effective tax rate as compared to the prior quarter. As a result of these factors, and due to potential changes in the Company’s period-to-period results, fluctuations in the Company’s effective tax rate and respective tax provisions or benefits may occur. For the six months ended June 30, 2025, the Company recorded a provision for income tax of $2.26 billion on a pretax income of $8.06 billion, which resulted in an effective tax rate of 28.0%. For the six months ended June 30, 2024, the Company recorded a benefit from income taxes of $273.3 million on a pretax loss of $428.9 million, which resulted in an effective tax rate of 63.7%. During the six months ended June 30, 2025, the Company’s income taxes primarily related to the tax effect of the unrealized gain on digital assets. During the six months ended June 30, 2024, the Company’s benefit from income taxes primarily related to (i) a tax benefit related to

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share-based compensation (including the income tax effects of exercises of stock options and vesting of share-settled restricted stock units) and (ii) a tax benefit from an increase in the Company’s deferred tax asset related to the impairment on its bitcoin holdings.

As of June 30, 2025, the Company had a valuation allowance of $0.5 million primarily related to the Company’s deferred tax assets related to foreign tax credits in certain jurisdictions that, in the Company’s present estimation, more likely than not will not be realized. As of June 30, 2025, the Company had deferred tax liabilities with respect to the unrealized gain on its bitcoin holdings of approximately $6.31 billion. The Company’s deferred tax liabilities are partially offset by deferred tax assets, such as net operating losses and capitalized research and development costs. If the market value of bitcoin declines in future periods, the Company’s deferred tax liability with respect to the unrealized gain on its bitcoin holdings will decrease, and the Company may be required to establish additional valuation allowances against its deferred tax assets. The Company will continue to regularly assess the realizability of deferred tax assets.

The Company records liabilities related to its uncertain tax positions. As of June 30, 2025, the Company had gross unrecognized income tax benefits, including accrued interest, of $10.5 million, of which $3.1 million was recorded in “Other long-term liabilities” and $7.4 million was recorded in “Deferred tax liabilities” in the Company’s Consolidated Balance Sheet. As of December 31, 2024, the Company had gross unrecognized income tax benefits of $10.2 million, including accrued interest, $2.9 million of which was recorded in “Other long-term liabilities” and $7.3 million of which was recorded in “Deferred tax assets, net” in the Company’s Consolidated Balance Sheet. During the second quarter of 2025, the Company was notified that it was selected for examination by the IRS for its 2022 federal income tax return.

On July 4, 2025, the One Big Beautiful Bill Act was enacted in the U.S., introducing several changes to corporate taxation. These changes include modifications to capitalization of research and development expenses, limitations on deductions for interest expense, accelerated fixed asset depreciation, and adjustments to the international tax framework. We are currently evaluating the full impact of this legislation on our consolidated financial statements. Since the legislation was signed into law after the close of our second quarter, its impacts are not included in our operating results for the six months ended June 30, 2025.

(8) Share-based Compensation

Stock Incentive Plans

Prior to its expiration, the Company maintained the 2013 Stock Incentive Plan (as amended, the “2013 Equity Plan”), under which the Company’s employees, officers, and directors were awarded various types of share-based compensation, including options to purchase shares of the Company’s class A common stock, restricted stock units, and other stock-based awards. In May 2023, the 2013 Equity Plan expired and no new awards may be granted under the 2013 Equity Plan, although awards previously granted under the 2013 Equity Plan will continue to remain outstanding in accordance with their terms.

The Company maintains the 2023 Equity Incentive Plan (as amended, the “2023 Equity Plan”) under which the Company’s employees, officers, directors, and other eligible participants may be awarded various types of share-based compensation, including options to purchase shares of the Company’s class A common stock, restricted stock units, performance stock units, and other stock-based awards. An aggregate of up to 19,327,030 shares of the Company’s class A common stock were authorized for issuance under the 2023 Equity Plan. As of June 30, 2025, there were 2,878,780 shares of class A common stock reserved and available for future issuance under the 2023 Equity Plan. The 2013 Equity Plan and the 2023 Equity Plan together are referred to herein as the “Stock Incentive Plans.”

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Stock option awards

As of June 30, 2025, there were options to purchase 4,158,290 shares of class A common stock outstanding under the Stock Incentive Plans. The following table summarizes the Company’s stock option activity (in thousands, except per share data and years) for the six months ended June 30, 2025:

	Stock Options Outstanding
				Weighted Average		Aggregate		Weighted Average
				Exercise Price		Intrinsic		Remaining Contractual
	Shares			Per Share		Value		Term (Years)
Balance as of January 1, 2025		4,956		$	38.56
Granted		51		$	296.15
Exercised		(624	)	$	36.94	$	196,136
Forfeited/Expired		(225	)	$	46.11
Balance as of June 30, 2025		4,158		$	41.54
Exercisable as of June 30, 2025		3,022		$	38.80	$	1,104,323		5.4
Expected to vest as of June 30, 2025		1,136		$	48.82	$	403,849		7.3
Total		4,158		$	41.54	$	1,508,172		5.9

Stock options outstanding as of June 30, 2025 are comprised of the following range of exercise prices per share (in thousands, except per share data and years):

	Stock Options Outstanding at June 30, 2025
			Weighted Average		Weighted Average
			Exercise Price		Remaining Contractual
Range of Exercise Prices per Share	Shares		Per Share		Term (Years)
$12.45 - $20.00		1,114	$	15.55		4.5
$20.01 - $30.00		912	$	24.59		7.0
$30.01 - $40.00		23	$	30.16		5.3
$40.01 - $50.00		1,171	$	41.30		6.3
$50.01 - $70.00		807	$	69.12		5.7
$70.01 - $220.00		76	$	159.52		8.6
$220.01 - $300.00		41	$	261.29		9.6
$300.01 - $364.20		11	$	364.20		9.5
$364.21  and over		3	$	369.06		9.9
Total		4,158	$	41.54		5.9

An aggregate of 1,161,010 stock options with an aggregate grant date fair value of $34.5 million vested during the six months ended June 30, 2025. An aggregate of 1,384,650 stock options with an aggregate grant date fair value of $37.5 million vested during the six months ended June 30, 2024. The weighted average grant date fair value of stock option awards using the Black-Scholes valuation model was $296.15 and $111.23 for each share subject to a stock option granted during the six months ended June 30, 2025 and 2024, respectively, based on the following assumptions:

	Six Months Ended
	June 30,
	2025	2024
Expected term of awards in years	5.5-6.3	5.5 - 6.3
Expected volatility	83.8% - 91.5%	75.1% - 82.8%
Risk-free interest rate	4.0% - 4.4%	4.2% - 4.5%
Expected dividend yield	0.0%	0.0%

For the three and six months ended June 30, 2025, the Company recognized approximately $5.2 million and $11.8 million, respectively, in share-based compensation expense from stock options granted under the Stock Incentive Plans. For the three and six months ended June 30, 2024, the Company recognized approximately $10.3 million and $20.1 million, respectively, in share-based compensation expense from stock options granted under the Stock Incentive Plans. As of June 30, 2025, there was approximately $29.5 million of total unrecognized share-based compensation expense related to unvested stock options, which the Company expects to recognize over a weighted average vesting period of approximately 2.3 years.

20

Share-settled restricted stock units

As of June 30, 2025, there were 880,064 share-settled restricted stock units outstanding under the Stock Incentive Plans. The following table summarizes the Company’s share-settled restricted stock unit activity (in thousands) for the periods indicated:

	Share-Settled Restricted Stock Units Outstanding
				Aggregate
	Units			Intrinsic Value
Balance as of January 1, 2025		1,231
Granted		140
Vested		(334	)	$	120,067
Forfeited		(157	)
Balance as of June 30, 2025		880
Expected to vest as of June 30, 2025		880		$	355,748

During the six months ended June 30, 2025, 334,120 share-settled restricted stock units vested having an aggregate grant date fair value of $18.3 million. During the six months ended June 30, 2024, 374,580 share-settled restricted stock units having an aggregate grant date fair value of $11.7 million vested, and 25,060 shares were withheld to satisfy tax obligations, resulting in 349,520 issued shares. The weighted average grant date fair value of share-settled restricted stock units granted during the six months ended June 30, 2025 and 2024 was $281.30 and $145.22, respectively, based on the fair value of the Company’s class A common stock.

For the three and six months ended June 30, 2025, the Company recognized approximately $7.1 million and $12.3 million, respectively, in share-based compensation expense from share-settled restricted stock units granted under the Stock Incentive Plans. For the three and six months ended June 30, 2024, the Company recognized approximately $7.4 million and $12.1 million, respectively, in share-based compensation expense from share-settled restricted stock units granted under the Stock Incentive Plans. As of June 30, 2025, there was approximately $74.3 million of total unrecognized share-based compensation expense related to unvested share-settled restricted stock units, which the Company expects to recognize over a weighted average vesting period of approximately 3.0 years.

Share-settled performance stock units

As of June 30, 2025, there were 279,264 performance stock units outstanding under the 2023 Equity Plan. The following table summarizes the Company’s performance stock unit activity (in thousands) for the periods indicated:

	Share-Settled Performance Stock Units Outstanding
				Aggregate
	Units			Intrinsic Value
Balance as of January 1, 2025		307
Granted		24
Vested		0		$	0
Forfeited		(52	)
Balance as of June 30, 2025		279
Expected to vest as of June 30, 2025		279		$	225,774

The weighted average grant date fair value of performance stock units using the Monte-Carlo simulation model was $445.66 and $307.13 for each performance stock unit granted during the six months ended June 30, 2025 and 2024, respectively, based on the following assumptions:

	Six Months Ended
	June 30,
	2025			2024
Expected term of awards in years		3.0			3.0
Expected volatility		99.2	%		92.7	%
Risk-free interest rate		3.9	%		4.4	%
Expected dividend yield		0.0	%		0.0	%

No performance stock units vested during the six months ended June 30, 2025 and 2024. For the three and six months ended June 30, 2025, the Company recognized approximately $2.7 million and $3.4 million, respectively, in share-based compensation expense from performance stock units granted under the 2023 Equity Plan. For the three and six months ended June 30, 2024, the Company recognized approximately $2.4 million and $3.5 million, respectively, in share-based compensation expense from performance stock units granted under the 2023 Equity Plan. As of June 30, 2025, there was approximately $21.9 million of total unrecognized share-based compensation

21

expense related to unvested performance stock units, which the Company expects to recognize over a weighted average vesting period of approximately 2.1 years.

Other stock-based awards and cash-settled restricted stock units

From time to time the Company has granted “other stock-based awards” and “cash-settled restricted stock units” under the 2013 Equity Plan. Other stock-based awards are similar to stock options, and cash-settled restricted stock units are similar to the Company’s share-settled restricted stock units, except in each case these awards are settled in cash only and not in shares of the Company’s class A common stock. Due to their required cash settlement feature, these awards are classified as liabilities in the Company’s Consolidated Balance Sheets and the fair value of the awards is remeasured each quarterly reporting period. For the three and six months ended June 30, 2025, the Company recognized zero expense and a reduction of approximately $1.1 million, respectively, in share-based compensation expense from other stock-based awards and cash-settled restricted stock units. For the three and six months ended June 30, 2024, the Company recognized approximately $0.1 million and $1.9 million, respectively, in share-based compensation expense from other stock-based awards and cash-settled restricted stock units. As of June 30, 2025, there were no other stock-based awards or cash-settled restricted stock units outstanding and there was no unrecognized share-based compensation expense.

2021 ESPP

The Company also maintains the 2021 Employee Stock Purchase Plan (the “2021 ESPP”). The purpose of the 2021 ESPP is to provide eligible employees of the Company and certain of its subsidiaries with opportunities to purchase shares of the Company’s class A common stock in 6-month offering periods commencing on each March 1 and September 1. An aggregate of 1,000,000 shares of the Company’s class A common stock has been authorized for issuance under the 2021 ESPP. During the six months ended June 30, 2025, 25,998 shares of class A common stock were issued in connection with the 2021 ESPP. As of June 30, 2025, 476,404 shares of the Company’s class A common stock remained available for issuance under the 2021 ESPP.

For the three and six months ended June 30, 2025, the Company recognized approximately $0.8 million and $1.2 million, respectively, in share-based compensation expense related to the 2021 ESPP. For the three and six months ended June 30, 2024, the Company recognized approximately $0.4 million and $0.8 million, respectively, in share-based compensation expense related to the 2021 ESPP. As of June 30, 2025, there was approximately $0.5 million of total unrecognized share-based compensation expense related to the 2021 ESPP, which the Company expects to recognize over a period of approximately 0.2 years.

Tax Benefits Related to Equity Plans

The following table summarizes the tax benefit related to the Company’s equity plans (in thousands) for the three and six months ended June 30, 2025 and 2024:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2025			2024			2025			2024
Tax benefit related to:
Share-based compensation expense	$	(2,443	)	$	(3,887	)	$	(4,331	)	$	(8,079	)
Exercises of stock options and vesting of share-settled restricted stock units		(40,192	)		(52,960	)		(64,797	)		(157,266	)
Total tax benefit related to the Company's equity plans	$	(42,635	)	$	(56,847	)	$	(69,128	)	$	(165,345	)

(9) Redeemable Preferred Stock

The STRK Stock, STRF Stock, and STRD Stock discussed in this note below are classified within mezzanine equity, as certain events that could cause such shares to become redeemable are not solely within the control of the Company. Issuances of the Preferred Stock are recognized based on proceeds received, net of issuance costs and are not accreted to its redemption value unless it is probable that the Preferred Stock will become redeemable. The Company has evaluated the probability of a redemption in connection with a Fundamental Change (defined below). Based on current facts and circumstances and the Company’s current and projected capital structure, management has determined that the occurrence of a Fundamental Change is remote. Accordingly, the Company concluded that accretion to the redemption value of the Preferred Stock is not required as of the reporting date.

22

The following table summarizes the key terms and provisions of each series of Preferred Stock, and information relating to the initial offerings of Preferred Stock and offerings completed as of June 30, 2025. The summaries below are qualified in their entirety by the full text of the applicable certificate of designations.

	STRK Stock			STRF Stock			STRD Stock
Trading Symbol on NASDAQ	STRK			STRF			STRD
Initial Issuance Date	February 5, 2025			March 25, 2025			June 10, 2025
Initial Shares Issued		7,300,000			8,500,000			11,764,700
Initial Public Offering Price	$80.00 per share			$85.00 per share			$85.00 per share
Initial Net Proceeds (in thousands)	$	563,226		$	710,873		$	979,486
Initial Issuance Costs (in thousands)	$	20,774		$	11,627		$	20,514
Shares Issued as of June 30, 2025		12,201,367			10,066,750			11,764,700
Par Value Per Share	$	0.001		$	0.001		$	0.001
Liquidation Preference Per Share as of June 30, 2025 (1)	$	100.00		$	105.30		$	100.00
Stated Amount	n/a			$	100.00		$	100.00
Dividend Rate Per Annum		8	%		10	%		10	%
Cumulative Dividends	Yes			Yes			No
Dividend Payment Method	Cash, class A common stock, or a combination of both			Cash			Cash
Conversion Privilege	Convertible to class A common stock at any time			None			None
Initial Conversion Rate	0.1 shares of class A common stock per share of STRK Stock			n/a			n/a
Redemption Rights (2)	Yes			Yes			Yes
Repurchase Rights (3)	Yes, upon a fundamental change			Yes, upon a fundamental change			Yes, upon a fundamental change
Board Rights (4)	Yes			Yes			No

(1)The liquidation preference per share of the STRF Stock and STRD Stock will generally approximate its trading price with a floor of $100. As of June 30, 2025, the liquidation preference per share of the STRK Stock was $100. See Note 14, Subsequent Events—Amendment to STRK Stock, and Note 6, Commitments and Contingencies – Shareholder and Derivative Actions.

(2)As set forth in the applicable certificate of designations, upon the occurrence of certain events, the Company will have the right, at its election, to redeem all, and not less than all, of the applicable series of Preferred Stock for cash at a redemption price calculated in accordance with the applicable certificate of designations.

(3)If a “Fundamental Change” (as defined in the applicable certificate of designations) occurs, then (subject to a limited exception in the case of STRK Stock), holders of each series of Preferred Stock will (subject to a limited exception) have the right to require the Company to repurchase some or all of their shares of the applicable series of Preferred Stock for cash at a repurchase price calculated in accordance with the applicable certificate of designations.

(4)Holders of STRD Stock do not have the right to elect any directors to the Company’s board of directors upon non-payment of regular dividends. However, with respect to STRK Stock and STRF Stock, if (in each case, subject to the applicable certificate of designations) less than the full amount of accumulated and unpaid regular dividends on the applicable series of Preferred Stock have been declared and paid by the following regular dividend payment date in respect of each of (i) four or more consecutive regular dividend payment dates; and (ii) eight or more consecutive regular dividend payment dates, then, in each case, subject to certain limitations, the authorized number of the Company’s directors will automatically increase by one (or the Company will vacate the office of one of its directors) and the holders of the applicable series of Preferred Stock, voting together as a single class with the holders of each class or series of “Voting Parity Stock” (as defined in the applicable certificate of designations) with similar voting rights that are then exercisable, will have the right to elect one director to fill such directorship at the Company’s next annual meeting of stockholders (or, if earlier, at a special meeting of the Company’s stockholders called for such purpose). If, thereafter, all accumulated and unpaid regular dividends on the outstanding shares of the applicable series of Preferred Stock have been paid in full, then this right will terminate. Upon the termination of such right with respect to the applicable series of Preferred Stock and all other outstanding Voting Parity Stock, if any, the term of office of each person then serving as a director pursuant to this right will immediately and automatically terminate (and, if the authorized number of the Company’s directors was increased by one or two, as applicable, in connection with such election, then the authorized number of the Company’s directors will automatically decrease by one or two, as applicable).

23

At-the Market Offerings of Preferred Stock

As of June 30, 2025, the Company has entered into the following at-the-market offering programs with respect to the Preferred Stock:

•STRK ATM Offering: On March 10, 2025, the Company entered into a sales agreement (the “STRK Sales Agreement”) with agents pursuant to which the Company could issue and sell shares of its STRK Stock through an at-the-market equity offering program (the “STRK ATM Offering”), pursuant to which the Company may issue and sell shares of its STRK Stock having an aggregate offering price of up to $21 billion from time to time through the sales agents under the STRK ATM Offering. For more information about the STRK ATM Offering, see Note 11, At-the-Market Offerings – Preferred Stock ATM Offerings.

•STRF ATM Offering: On May 22, 2025, the Company entered into a sales agreement (the “Original STRF Sales Agreement”) with agents pursuant to which the Company could issue and sell shares of its STRF Stock through an at-the-market equity offering program (the “STRF ATM Offering” and, together with the STRK ATM Offering, the “Preferred Stock ATM Offerings”), pursuant to which the Company may issue and sell shares of its STRF Stock having an aggregate offering price of up to $2.1 billion from time to time through the sales agents under the STRF ATM Offering. On July 7, 2025, the Company entered into an amendment (the “STRF Sales Agreement Amendment”) to the Original STRF Sales Agreement to add an additional sales agent to the STRF ATM Offering. The Original STRF Sales Agreement, as amended by the STRF Sales Agreement Amendment, is herein referred to as the “STRF Sales Agreement” in this Quarterly Report on Form 10-Q. For more information about the STRF ATM Offering, see Note 11, At-the-Market Offerings – Preferred Stock ATM Offerings.

Refer to Note 14, Subsequent Events, for additional information regarding the Company’s at-the-market offering programs with respect to the Preferred Stock.

Dividends paid on Preferred Stock

On June 2, 2025, the Company announced that its board of directors declared a quarterly cash dividend of approximately $2.00 per share payable on the STRK Stock, and approximately $2.64 per share payable on the STRF Stock. The calculation of the STRF Stock per share dividend amount reflects the quarterly dividend accrued from March 25, 2025, the issuance date of the STRF Stock.

The Company declared and paid dividends of $32.6 million on the STRK Stock for the six months ended June 30, 2025 and $25.5 million on the STRF Stock for the six months ended June 30, 2025. As of June 30, 2025, there were no preferred stock dividends in arrears.

(10) Basic and Diluted Earnings (Loss) per Common Share

Basic earnings (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average common stock outstanding during the respective period. Net income (loss) attributable to common stockholders is computed by deducting both the dividends declared in the period on the Company’s redeemable preferred stock and the dividends accrued for the period on the Company’s redeemable preferred stock, if any, from net income (loss). As of June 30, 2025, there were no cumulative preferred dividends payable in arrears on the Company’s redeemable preferred stock.

The Company has two classes of common stock: class A common stock and class B common stock. Holders of class A common stock generally have the same rights, including rights to dividends, as holders of class B common stock, except that holders of class A common stock have one vote per share while holders of class B common stock have ten votes per share. Each share of class B common stock is convertible at any time, at the option of the holder, into one share of class A common stock. As such, basic and fully diluted earnings per common share for class A common stock and for class B common stock are the same. The Company has never declared or paid any cash dividends on either class A or class B common stock.

As of June 30, 2025, the Company had three series of preferred stock outstanding: STRK Stock, STRF Stock, and STRD Stock. Holders of the Preferred Stock do not have voting rights, except for rights to appoint a director to the Company’s board upon certain failures to pay dividends on preferred stock, and have rights to dividends and other rights as discussed in Note 9, Redeemable Preferred Stock, to the Consolidated Financial Statements. Additionally, each share of the STRK Stock is convertible at any time, at the option of the holder, into 0.1 shares of class A common stock.

The impact from potential shares of common stock on the diluted earnings per common share calculation are included when dilutive. Potential shares of class A common stock issuable upon the exercise of outstanding stock options, the vesting of restricted stock units and performance stock units considered probable of achievement, and in connection with the 2021 ESPP are computed using the treasury stock method. Potential shares of class A common stock issuable upon conversion of the Convertible Notes and upon conversion of the STRK Stock are computed using the if-converted method. In computing diluted earnings per common share, the Company first calculates the earnings per incremental share (“EPIS”) for each class of potential shares of common stock and ranks the classes from the most dilutive (i.e., lowest EPIS) to the least dilutive (i.e., highest EPIS). Basic earnings per common share is then adjusted for the effect of each class of shares, in sequence and cumulatively, until a particular class no longer produces further dilution.

The following table sets forth the computation of basic and diluted earnings (loss) per common share (in thousands, except per share data) for the periods indicated:

24

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2025			2024			2025			2024
Numerator:
Net income (loss)	$	10,020,846		$	(102,559	)	$	5,803,476		$	(155,677	)
Dividends on preferred stock		(49,110	)		0			(58,347	)		0
Net income (loss) attributable to common stockholders of Strategy - Basic	$	9,971,736		$	(102,559	)	$	5,745,129		$	(155,677	)
Effect of dilutive shares on net income {loss}:
Interest expense on 2027 Convertible Notes, net of tax		0			0			286			0
Interest expense on 2028 Convertible Notes, net of tax		1,887			0			3,755			0
Interest expense on 2029 Convertible Notes, net of tax		1,308			0			2,603			0
Interest expense on 2030A Convertible Notes, net of tax		1,606			0			3,194			0
Interest expense on 2030B Convertible Notes, net of tax		898			0			1,264			0
Interest expense on 2031 Convertible Notes, net of tax		1,390			0			2,767			0
Interest expense on 2032 Convertible Notes, net of tax		3,718			0			7,400			0
Dividends on STRK Stock		16,756			0			23,550			0
Net income (loss) - Diluted	$	9,999,300		$	(102,559	)	$	5,789,949		$	(155,677	)
Denominator:
Weighted average common shares of class A common stock		255,604			158,967			246,270			155,686
Weighted average common shares of class B common stock		19,640			19,640			19,640			19,640
Total weighted average shares of common stock outstanding - Basic		275,244			178,607			265,910			175,326
Effect of dilutive shares on weighted average common shares outstanding:
Stock options		3,615			0			3,847			0
Restricted stock units		5			0			495			0
Performance stock units		494			0			511			0
Employee stock purchase plan		3			0			2			0
Convertible preferred stock		963			0			702			0
2027 Convertible Notes		0			0			1,439			0
2028 Convertible Notes		5,513			0			5,513			0
2029 Convertible Notes		4,462			0			4,462			0
2030A Convertible Notes		5,342			0			5,342			0
2030B Convertible Notes		4,614			0			3,307			0
2031 Convertible Notes		2,594			0			2,594			0
2032 Convertible Notes		3,915			0			3,915			0
Total weighted average shares of common stock outstanding - Diluted		306,764			178,607			298,039			175,326
Income (loss) per share:
Basic income (loss) per share (1)	$	36.23		$	(0.57	)	$	21.61		$	(0.89	)
Diluted income (loss) per share (1)	$	32.60		$	(0.57	)	$	19.43		$	(0.89	)

25

For the three and six months ended June 30, 2025 and 2024, the following weighted average shares of potential class A common stock were excluded from the diluted earnings (loss) per common share calculation because their impact would have been anti-dilutive (in thousands).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Stock options		50		6,140		46		8,310
Restricted stock units		877		1,870		8		1,840
Performance stock units		0		610		0		560
Employee stock purchase plan		0		20		0		10
Convertible preferred stock		0		0		0		0
2025 Convertible Notes		0		3,660		0		10,000
2027 Convertible Notes		0		7,330		0		7,330
2028 Convertible Notes		0		0		0		0
2029 Convertible Notes		0		0		0		0
2030A Convertible Notes		0		5,340		0		3,380
2030B Convertible Notes		0		0		0		0
2031 Convertible Notes		0		2,590		0		1,500
2032 Convertible Notes		0		600		0		300
Total		927		28,160		54		33,230

(11) At-the-Market Offerings

Common Stock ATM Offerings

From time to time, the Company has entered into sales agreements with agents pursuant to which the Company could issue and sell shares of its class A common stock through at-the-market equity offering programs (the “Common Stock ATM Offerings”). Pursuant to these agreements, the Company agreed to pay the sales agents commissions for their services in acting as agents with respect to the sale of shares through the Common Stock ATM Offerings and also agreed to provide the sales agents with reimbursement for certain incurred expenses and customary indemnification and contribution rights. The following table summarizes the terms and provisions of each sales agreement, and each Common Stock ATM Offering that was active during the six months ended June 30, 2025 and the year ended December 31, 2024. The maximum aggregate offering price and cumulative net proceeds (less sales commissions and expenses) for each Common Stock ATM Offering in the following table are reported in thousands.

	May 2025 Sales Agreement			October 2024 Sales Agreement			August 2024 Sales Agreement			November 2023 Sales Agreement
Agreement effective date	May 1, 2025			October 30, 2024			August 1, 2024			November 30, 2023
Maximum aggregate offering price	$	21,000,000		$	21,000,000		$	2,000,000		$	750,000
Maximum commissions payable to sales agents on gross proceeds from the sale of shares		2.0	%		2.0	%		2.0	%		2.0	%
Date terminated/substantially depleted	n/a			April 30, 2025			November 19, 2024			July 31, 2024
As of June 30, 2025:
Cumulative shares of class A common stock sold under such sales agreement		7,137,083			58,384,669			11,685,355			12,720,770
Cumulative net proceeds received from shares of class A common stock sold under such sales agreement	$	2,885,277		$	20,962,051		$	1,993,273		$	747,025
Maximum aggregate offering price remaining available for sale under such sales agreement (1)	$	18,111,044		n/a			n/a			n/a

(1)Refer to Note 14, Subsequent Events, for Common Stock ATM Offering activity for the period from July 1, 2025 through July 31, 2025.

26

The following table summarizes the sales activity of each sales agreement that was active during 2025 or 2024 for the periods indicated. The net proceeds (less sales commissions and expenses) for each Common Stock ATM Offering in the following table are reported in thousands.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Number of shares of class A common stock sold under such sales agreement:
November 2023 Sales Agreement		0		0		0		1,951,620
August 2024 Sales Agreement		0	n/a			0	n/a
October 2024 Sales Agreement		7,088,537	n/a			19,713,132	n/a
May 2025 Sales Agreement		7,137,083	n/a			7,137,083	n/a
Total shares of class A common stock sold pursuant to Common Stock ATM Offerings		14,225,620		0		26,850,215		1,951,620
Net proceeds received from shares of class A common stock sold under such sales agreement:
November 2023 Sales Agreement	$	0	$	0	$	0	$	137,152
August 2024 Sales Agreement		0	n/a			0	n/a
October 2024 Sales Agreement		2,363,415	n/a			6,762,620	n/a
May 2025 Sales Agreement		2,885,277	n/a			2,885,277	n/a
Total net proceeds received from shares of class A common stock sold pursuant to Common Stock ATM Offerings	$	5,248,692	$	0	$	9,647,897	$	137,152

The sales commissions and expenses related to each of the above Common Stock ATM Offerings are considered direct and incremental costs and are charged against “Additional paid-in capital” on the Consolidated Balance Sheet in the period in which the corresponding shares are issued and sold.

Preferred Stock ATM Offerings

As of June 30, 2025, the Company has entered into sales agreements with agents pursuant to which the Company could issue and sell shares of its STRK Stock having an aggregate offering price of up to $21.0 billion (“STRK ATM Shares”) through the STRK ATM Offering and shares of its STRF Stock having an aggregate offering price of up to $2.1 billion (“STRF ATM Shares”) through the STRF ATM Offering. Refer to Note 14, Subsequent Events, for additional information on the Company’s at-the-market offering programs of preferred stock, including the STRK ATM Offering and the STRF ATM Offering. Pursuant to these agreements, the Company agreed to pay the sales agents commissions for their services in acting as agents with respect to the sale of shares through the Preferred Stock ATM Offerings and also agreed to provide the sales agents with reimbursement for certain incurred expenses and customary indemnification and contribution rights. The following table summarizes the terms and provisions of each sales agreement, and each Preferred Stock ATM Offering that was active during the six months ended June 30, 2025. The maximum aggregate offering price and cumulative net proceeds (less sales commissions and expenses) for each Preferred Stock ATM Offering in the following table are reported in thousands.

	STRK Sales Agreement			STRF Sales Agreement
Agreement effective date	March 10, 2025			May 22, 2025
Maximum aggregate offering price	$	21,000,000		$	2,100,000
Maximum commissions payable to sales agents on gross proceeds from the sale of shares		2.0	%		2.0	%
Date terminated/substantially depleted	n/a			n/a
As of June 30, 2025:
Cumulative shares of Preferred Stock sold under such sales agreement		4,901,367			1,566,750
Cumulative net proceeds received from shares of Preferred Stock sold under such sales agreement	$	477,190		$	163,034
Maximum aggregate offering price remaining available for sale under such sales agreement (1)	$	20,522,113		$	1,936,702

(1)Refer to Note 14, Subsequent Events, for Preferred Stock ATM Offering activity for the period from July 1, 2025 through July 31, 2025.

27

The following table summarizes the sales activity of each Preferred Stock ATM Offering that was active during 2025 for the periods indicated. The net proceeds (less sales commissions and expenses) for each Preferred Stock ATM Offering in the following table are reported in thousands.

	Three Months Ended		Six Months Ended
	June 30,
	2025
Number of shares of Preferred Stock sold under such sales agreement:
STRK Sales Agreement		4,551,460		4,901,367
STRF Sales Agreement		1,566,750		1,566,750
Total shares of Preferred Stock sold pursuant to Preferred Stock ATM Offerings (1)		6,118,210		6,468,117
Net proceeds received from shares of Preferred Stock sold under such sales agreement:
STRK Sales Agreement	$	446,792	$	477,190
STRF Sales Agreement		163,034		163,034
Total net proceeds received from shares of Preferred Stock sold pursuant to Preferred Stock ATM Offerings (1)	$	609,826	$	640,224

(1)Refer to Note 14, Subsequent Events, for Preferred Stock ATM Offering activity for the period from July 1, 2025 through July 31, 2025.

(12) Segment Information

The Company has one reportable operating segment, the “Software Business,” which is engaged in the design, development, marketing, and sales of the Company’s enterprise analytics software platform through cloud subscriptions and licensing arrangements and related services (i.e., product support, consulting and education). The “Corporate & Other” category presented in the following tables is not considered an operating segment. It consists primarily of costs and expenses related to executing the Company’s bitcoin strategy and includes the unrealized gain or loss on digital assets, impairment charges and other third-party costs associated with the Company’s bitcoin holdings, net interest expense primarily related to long-term debt obligations (the net proceeds of which were primarily used to purchase bitcoin), and income tax effects generated from the Company’s bitcoin holdings and related debt issuances. Beginning in 2025, the Company has dedicated certain corporate resources to its bitcoin strategy. These costs, including related Share-based compensation expense are included within the “Corporate resources” and the “Share-based compensation expense” segment expense line items to better align with their activities and utilization.

The Company’s chief operating decision maker (“CODM”), is the Company’s Chief Executive Officer, who manages the entity on a consolidated basis. The CODM uses “net income (loss)” to assess the profitability of the software business by comparing actual to budgeted results on a monthly basis. In doing so, he focuses on “controllable costs” across main functions of the Software Business and will allocate personnel and budget accordingly to maximize potential profitability. The CODM also uses “net income (loss)” to understand the impact from income taxes and debt-related items for general tax and liquidity planning purposes.

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The following tables present (for each of the Software Business segment and Corporate & Other category, and on a consolidated basis) the Company’s revenues and significant expenses regularly provided to the CODM, reconciled to net income (loss) (in thousands) for each of the periods presented. Total segment assets (in thousands) provided to the CODM are also disclosed in the tables below for each period presented.

	Three Months Ended June 30, 2025
	Software Business			Corporate & Other			Total Consolidated
Total revenues	$	114,488		$	0		$	114,488
Significant expenses (1)
Controllable
Sales and marketing		(26,236	)		0			(26,236	)
Maintenance		(6,970	)		0			(6,970	)
Consulting		(12,096	)		0			(12,096	)
Cloud		(16,043	)		0			(16,043	)
Technology		(21,597	)		0			(21,597	)
Corporate resources		(16,406	)		(6,120	)		(22,526	)
Non-Controllable
Unrealized gain on digital assets		0			14,047,514			14,047,514
Digital asset custody fees		0			(4,881	)		(4,881	)
Share-based compensation expense		(12,543	)		(3,199	)		(15,742	)
Payroll taxes on equity award exercises and vestings		(2,620	)		(65	)		(2,685	)
Other segment items (2)		(9,507	)		0			(9,507	)
Interest income (expense), net (3)		76			(17,973	)		(17,897	)
Income tax benefit (expense) (4)		39,893			(4,024,869	)		(3,984,976	)
Net income	$	30,439		$	9,990,407		$	10,020,846
Total assets, as of June 30, 2025 (5)	$	410,617		$	64,362,798		$	64,773,415

	Three Months Ended June 30, 2024
	Software Business			Corporate & Other			Total Consolidated
Total revenues	$	111,442		$	0		$	111,442
Significant expenses (1)
Controllable
Sales and marketing		(26,433	)		0			(26,433	)
Maintenance		(7,015	)		0			(7,015	)
Consulting		(13,485	)		0			(13,485	)
Cloud		(9,619	)		0			(9,619	)
Technology		(25,981	)		0			(25,981	)
Corporate resources		(22,869	)		0			(22,869	)
Non-Controllable
Impairment losses on digital assets		0			(180,090	)		(180,090	)
Digital asset custody fees		0			(1,344	)		(1,344	)
Share-based compensation expense		(20,621	)		0			(20,621	)
Payroll taxes on equity award exercises and vestings		(3,702	)		0			(3,702	)
Other segment items (2)		247			(110	)		137
Interest expense, net (3)		0			(15,466	)		(15,466	)
Income tax benefit (4)		55,818			56,669			112,487
Net income (loss)	$	37,782		$	(140,341	)	$	(102,559	)
Total assets, as of June 30, 2024 (5)	$	585,503		$	6,467,570		$	7,053,073

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	Six Months Ended June 30, 2025
	Software Business			Corporate & Other			Total Consolidated
Total revenues	$	225,554		$	0		$	225,554
Significant expenses (1)
Controllable
Sales and marketing		(49,884	)		0			(49,884	)
Maintenance		(13,734	)		0			(13,734	)
Consulting		(23,710	)		0			(23,710	)
Cloud		(30,601	)		0			(30,601	)
Technology		(46,299	)		0			(46,299	)
Corporate resources		(35,072	)		(13,824	)		(48,896	)
Non-Controllable
Unrealized gain on digital assets		0			8,141,509			8,141,509
Digital asset custody fees		0			(9,003	)		(9,003	)
Share-based compensation expense		(21,205	)		(6,356	)		(27,561	)
Payroll taxes on equity award exercises and vestings		(4,661	)		(96	)		(4,757	)
Other segment items (2)		(14,247	)		0			(14,247	)
Interest income (expense), net (3)		174			(35,177	)		(35,003	)
Income tax benefit (expense) (4)		62,252			(2,322,144	)		(2,259,892	)
Net income	$	48,567		$	5,754,909		$	5,803,476

	Six Months Ended June 30, 2024
	Software Business			Corporate & Other			Total Consolidated
Total revenues	$	226,688		$	0		$	226,688
Significant expenses (1)
Controllable
Sales and marketing		(49,577	)		0			(49,577	)
Maintenance		(14,550	)		0			(14,550	)
Consulting		(27,949	)		0			(27,949	)
Cloud		(18,227	)		0			(18,227	)
Technology		(52,858	)		0			(52,858	)
Corporate resources		(44,215	)		0			(44,215	)
Non-Controllable
Impairment losses on digital assets		0			(371,723	)		(371,723	)
Digital asset custody fees		0			(2,098	)		(2,098	)
Share-based compensation expense		(38,412	)		0			(38,412	)
Payroll taxes on equity award exercises and vestings		(11,228	)		0			(11,228	)
Other segment items (2)		3,096			(533	)		2,563
Interest expense, net (3)		0			(27,347	)		(27,347	)
Income tax benefit (4)		157,724			115,532			273,256
Net income (loss)	$	130,492		$	(286,169	)	$	(155,677	)

(1)Significant expenses regularly provided to the CODM include both: (i) costs that the CODM considers to be “controllable”, for which the Company can manage future expense via the budgeting process (e.g. salaries, commissions, travel and entertainment expenses, third party-service provider fees, etc.), and that support each specific function of the Software Business (i.e. sales and marketing, maintenance, consulting, cloud, technology, and corporate resources) and (ii) costs that the CODM considers to be “non-controllable”, for which future expenses are primarily outside the Company’s control, such as losses (gains) on digital assets, digital asset impairment, and custody fees, share-based compensation expense, and employer payroll taxes related to the exercise or vesting of certain awards under the Stock Incentive Plans.

(2)Other segment items for the Software Business are primarily related to foreign currency transaction gains and losses, costs supporting the Company’s education function, one-time corporate initiatives, and certain expenses that are not easily allocable to specific functions. Other segment items for the Corporate & Other category are primarily related to third-party consulting and advisory fees.

(3)Interest expense, net is substantially related to interest expense on the Company’s long-term debt arrangements, the proceeds from which were primarily used to purchase bitcoin.

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(4)Income tax effects allocated to the Corporate & Other category are related solely to transactions involving the Company’s bitcoin or debt, including unrealized gains or losses on digital assets, digital asset impairment losses, interest expenses, gains and losses on debt extinguishments, share-based compensation expense, corporate resources (including personnel costs), and other third-party expenses.

(5)Due to the adoption of ASU 2023-08, segment assets allocated to the Corporate & Other category as of June 30, 2025 included only the Company’s digital assets. As of June 30, 2024, segment assets included the Company’s digital assets and deferred tax assets primarily related to digital asset impairment losses and interest expense.

The following table presents total revenues and long-lived assets (in thousands) according to geographic region. Long-lived assets are comprised of right-of-use assets and property and equipment, net. The Corporate & Other category disclosed above is included within the U.S. region.

Geographic regions:	U.S.		EMEA		Other Regions		Consolidated
Total revenues
Three months ended June 30, 2025	$	65,315	$	39,444	$	9,729	$	114,488
Three months ended June 30, 2024	$	63,778	$	36,968	$	10,696	$	111,442
Six months ended June 30, 2025	$	128,775	$	77,326	$	19,453	$	225,554
Six months ended June 30, 2024	$	128,157	$	75,321	$	23,210	$	226,688
Long-lived assets
As of June 30, 2025	$	70,385	$	3,469	$	7,922	$	81,776
As of December 31, 2024	$	69,767	$	3,556	$	7,564	$	80,887

The EMEA region includes operations in Europe, the Middle East, and Africa. The other regions include all other foreign countries, generally comprising Latin America, the Asia Pacific region, and Canada. For the three and six months ended June 30, 2025, Germany accounted for 10% or more of total consolidated revenues. For the three and six months ended June 30, 2024, no country accounted for 10% or more of total consolidated revenues.

For the three and six months ended June 30, 2025 and 2024, no individual customer accounted for 10% or more of total consolidated revenues.

(13) Related Party Transactions

Saylor Indemnification Agreements

On June 24, 2022, concurrently with binding directors and officers (“D&Os”) liability insurance policies (the “Initial Commercial Policies”) with several third-party carriers, the Company and Michael J. Saylor, the Company’s Chairman of the Board of Directors and Executive Chairman, entered into (i) an indemnification agreement (the “Excess Agreement”) for Mr. Saylor to provide $10 million in excess indemnity coverage payable only after the exhaustion of the Initial Commercial Policies, and (ii) an indemnification agreement (the “Tail Agreement”) for Mr. Saylor to provide $40 million in indemnity coverage for claims made at any time based on actions or omissions occurring prior to the inception date of the Initial Commercial Policies. The Company paid Mr. Saylor $600,000 for a one-year term under the Excess Agreement, and $150,000 for a 90-day term under the Tail Agreement. At the option of the Company, the Company was permitted to extend the term under the Tail Agreement for up to a total of twenty-three additional 90-day periods, for $150,000 per additional 90-day term. The Company elected to extend the term of the Tail Agreement for three consecutive additional 90-day periods and paid Mr. Saylor $150,000 for each extension.

On August 30, 2022, the Company bound additional D&O liability insurance policies (the “Excess Commercial Policies”) with third-party carriers for excess coverage payable only after the exhaustion of the Initial Commercial Policies. Effective as of the same date, the Company and Mr. Saylor executed an amendment (the “Amendment”) to the Excess Agreement to limit Mr. Saylor’s obligation to provide indemnification under the Excess Agreement to claims made during the term of the Excess Agreement which arise from wrongful acts occurring upon or after the commencement of the Excess Agreement but prior to the effective date of the Amendment. In connection with the Amendment, Mr. Saylor refunded $489,863 to the Company, representing the pro rata portion of the $600,000 originally paid by the Company to Mr. Saylor under the Excess Agreement attributable to the period from the date of the Amendment through the end of the original term of the Excess Agreement.

On June 12, 2023, the Company bound new D&O liability insurance policies (the “2023 Commercial Policies”) with third-party carriers that provide coverage substantially equivalent to the aggregate coverage provided under the Initial Commercial Policies and the Excess Commercial Policies for a policy period running from June 12, 2023 through June 12, 2024 except that the 2023 Commercial Policies also provide coverage for claims made with respect to wrongful acts or omissions occurring prior to the binding of the Initial Commercial Policies subject to exclusions with respect to claims previously noticed to and accepted by an earlier D&O insurer, claims related to acts or omissions giving rise to such claims, and demands, investigations, suits or other proceedings entered against an insured prior to June 24, 2022, as well as future interrelated wrongful acts.

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On June 12, 2023, the Company entered into a new indemnification agreement with Mr. Saylor (the “2023 Tail Agreement”) pursuant to which Mr. Saylor agreed to provide coverage that is similar to the coverage provided under the Tail Agreement, but only for matters excluded from coverage under the 2023 Commercial Policies for an initial one-year term for a payment of $157,000. Pursuant to the terms of the 2023 Tail Agreement, the Company elected to extend the term of the 2023 Tail Agreement for a period of one-year commencing on June 12, 2024, and paid Mr. Saylor $157,000 during the three months ended June 30, 2024. Additionally, during the three months ended June 30, 2024, the 2023 Commercial Policies were also extended for another policy year running from June 12, 2024 to June 12, 2025, on substantially the same terms, but with an increase in the aggregate indemnity coverage provided by the commercial carriers from $40 million to $60 million.

On June 12, 2025, the Company bound new D&O liability insurance policies (the “2025 Commercial Policies”) with third-party carriers that provide $120 million in aggregate coverage for a policy period running from June 12, 2025 through June 12, 2026. The Company has determined that the 2025 Commercial Policies provide sufficient D&O coverage; accordingly, the 2023 Tail Agreement was not extended beyond June 12, 2025.

The Excess Agreement, Tail Agreement and other related party transactions between the Company and Mr. Saylor are described more fully in Note 17 to the Consolidated Financial Statements of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Allocation Agreements

On August 31, 2022, the District of Columbia (the “District”), through its Office of the Attorney General, filed a civil complaint in the Superior Court of the District of Columbia naming as defendants (i) Michael J. Saylor, the Chairman of the Company’s board of directors and the Company’s Executive Chairman, in his personal capacity, and (ii) the Company. The District sought, among other relief, monetary damages under the District’s False Claims Act for the alleged failure of Mr. Saylor to pay personal income taxes to the District over a number of years together with penalties, interest, and treble damages. The complaint alleged in the sole claim against the Company that it violated the District’s False Claims Act by conspiring to assist Mr. Saylor’s alleged failure to pay personal income taxes. On May 31, 2024, the District, Mr. Saylor, and the Company stipulated to the entry of a Consent Order and Judgment (“Consent Order”) with the court pursuant to which the District, upon receipt of all amounts due under the Consent Order, released Mr. Saylor and the Company from all claims and liabilities that the District asserted, could have asserted, or may assert in the future based on the conduct described in the complaints filed in the case.

In connection with the Consent Order, on May 31, 2024, the Company and Mr. Saylor entered into an agreement pursuant to which Mr. Saylor and the Company agreed that Mr. Saylor would pay $40,000,000 due to the District to settle the case and resolve the litigation with the District. Pursuant to a separate agreement between Mr. Saylor and the Company, Mr. Saylor paid this settlement amount to the District in full and the Company is not obligated to make any contribution to the settlement payment. On July 15, 2024, Mr. Saylor and the Company entered into a separate agreement with counsel to Tributum, LLC, the relator in the case (“Relator”), to resolve the amount due to such counsel in satisfaction of Relator’s claims for statutory expenses, attorneys’ fees and costs. Pursuant to the separate agreement between Mr. Saylor and the Company, Mr. Saylor paid this settlement amount in full and the Company is not obligated to make any contribution to this settlement payment.

(14) Subsequent Events

Digital asset purchases

From July 1, 2025 through July 31, 2025, the Company has purchased approximately 31,466 bitcoins for 3.68 billion, or approximately $116,860 per bitcoin.

Amendment to STRK Stock

On July 7, 2025, the Company filed a certificate of amendment (the “STRK Amendment”) with the Secretary of State of the State of Delaware to the STRK Stock certificate of designations so that, together with other conforming changes, the STRK Stock has a liquidation preference that is initially $100 per share; provided, however, that, effective immediately after the close of business on each business day on or after July 7, 2025 (and, on or after July 7, 2025, if applicable, during the course of a business day on which any sale transaction to be settled by the issuance of STRK Stock is executed, from the exact time of the first such sale transaction during such business day until the close of business of such business day), the liquidation preference per share of STRK Stock will be adjusted to be the greatest of (i) the stated amount of $100 per share of STRK Stock (the “Stated Amount”); (ii) in the case of any business day on or after July 7, 2025 with respect to which Strategy has, on such business day or any business day during the ten trading day period preceding such business day, executed any sale transaction to be settled by the issuance of STRK Stock, an amount equal to the Last Reported Sale Price (as defined in the certificate of designations for the STRK Stock) per share of STRK Stock on the trading day immediately before such business day; and (iii) the arithmetic average of the Last Reported Sale Prices per share of STRK Stock for each trading day of the ten consecutive trading days immediately preceding such business day; provided that, for purposes of the definition of liquidation preference,

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the execution of the STRK Amendment will be treated as an execution of a sale transaction settled by the issuance of STRK Stock. See Note 6, Commitments and Contingencies.

Initial public offering of STRC Stock

On July 29, 2025, the Company completed a registered public offering of 28,011,111 shares of its Variable Rate Series A Perpetual Stretch Preferred Stock (“STRC Stock”), at a price to the public of $90.00 per share, for net proceeds of approximately $2.47 billion, after deducting the underwriting discounts and commissions and the Company’s estimated offering expenses. The Company filed a certificate of designations with the Secretary of State of the State of Delaware designating and establishing the terms of the STRC Stock. The STRC Stock is listed for trading on the Nasdaq Global Select Market under the symbol “STRC.”

The STRC Stock will accumulate cumulative dividends at a variable rate (as described below) per annum on the stated amount of $100 per share thereof. Regular dividends on the STRC Stock will be payable when, as and if declared by the Company’s board of directors or any duly authorized committee thereof, out of funds legally available for their payment, monthly in arrears on the last calendar day of each calendar month, beginning on August 31, 2025. The initial monthly regular dividend rate per annum will be 9.00%. However, the Company will have the right, in its sole and absolute discretion, to adjust the monthly regular dividend rate per annum applicable to subsequent regular dividend periods. The Company’s right to adjust the monthly regular dividend rate per annum will be subject to certain restrictions. For example, the Company will not be permitted to reduce the monthly regular dividend rate per annum that will apply to any regular dividend period (i) by more than the following amount from the monthly regular dividend rate per annum applicable to the prior regular dividend period: the sum of (1) 25 basis points; and (2) the excess, if any, of (x) the one-month term secured overnight financing rate (“SOFR”) rate on the first business day of such prior regular dividend period, over (y) the minimum of the one-month term SOFR rates that occur on the business days during the period from, and including, the first business day of such prior regular dividend period to, and including, the last business day of such prior regular dividend period; or (ii) to a rate per annum that is less than the one-month term SOFR rate in effect on the business day before the Company provides notice of the next monthly regular dividend rate per annum. In addition, the Company will not be entitled to elect to reduce the monthly regular dividend rate per annum unless all accumulated regular dividends, if any, on the STRC Stock then outstanding for all prior completed regular dividend periods, if any, have been paid in full. The Company’s current intention (which is subject to change in the Company’s sole and absolute discretion) is to adjust the monthly regular dividend rate per annum in such manner as the Company believes is designed to cause the STRC Stock to trade at prices at or close to its stated amount of $100 per share. Declared regular dividends on the STRC Stock will be payable solely in cash. In the event that any accumulated regular dividend on the STRC Stock is not paid on the applicable regular dividend payment date, then additional regular dividends (“STRC compounded dividends”) will accumulate on the amount of such unpaid regular dividend, compounded monthly on each subsequent regular dividend payment date at the monthly regular dividend rate per annum applicable to the relevant regular dividend period, from, and including, the calendar day after such regular dividend payment date to, and including, the date the same, including all STRC compounded dividends thereon, is paid in full. The STRC Stock also has certain redemption and repurchase rights, in the manner, and subject to the terms, set forth in the STRC Stock certificate of designations.

At-the-market offerings

ATM Updates

During the period from July 1, 2025 through July 31, 2025, the Company sold an aggregate of 2,433,381 shares of its class A common stock under the May 2025 Sales Agreement for aggregate net proceeds to the Company (less sales commissions) of approximately $1.07 billion. As of July 31, 2025, $17.04 billion of shares of the Company’s class A common stock remained available for issuance and sale pursuant to the May 2025 Sales Agreement.

During the period from July 1, 2025 through July 31, 2025, the Company sold an aggregate of 579,417 STRK ATM Shares under the STRK ATM Offering, for aggregate net proceeds to the Company (less sales commissions) of approximately $71.8 million. As of July 31, 2025, approximately $20.45 billion of STRK ATM Shares remained available for issuance and sale pursuant to the STRK ATM Offering.

On July 7, 2025, the Company amended the Original STRF Sales Agreement to include an additional sales agent. During the period from July 1, 2025 through July 31, 2025, the Company sold an aggregate of 446,005 STRF ATM Shares under the STRF ATM Offering, for aggregate net proceeds to the Company (less sales commissions) of approximately $55.6 million. As of July 31, 2025, approximately $1.88 billion of STRF ATM Shares remained available for issuance and sale pursuant to the STRF ATM Offering.

STRD ATM

On July 7, 2025, the Company entered into a sales agreement (the “STRD Sales Agreement”) with agents pursuant to which the Company could issue and sell shares of its STRD Stock through an at-the-market equity offering program (the “STRD ATM Offering”) and filed a prospectus supplement for the STRD ATM Offering, pursuant to which the Company may issue and sell shares of its STRD Stock having an aggregate offering price of up to $4.2 billion (“STRD ATM Shares”) from time to time through the sales agents under the STRD ATM Offering. During the period from July 7, 2025 through July 31, 2025, the Company sold an aggregate of 189,560 STRD ATM Shares

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under the STRD ATM Offering, for aggregate net proceeds to the Company (less sales commissions) of approximately $17.9 million. As of July 31, 2025, approximately 4.18 billion of STRD ATM Shares remained available for issuance and sale pursuant to the STRD ATM Offering.

STRC ATM

On July 31, 2025, the Company entered into a sales agreement (the “STRC Sales Agreement”) with agents pursuant to which the Company could issue and sell shares of its STRC Stock through an at-the-market equity offering program (the “STRC ATM Offering”) and filed a prospectus supplement for the STRC ATM Offering, pursuant to which the Company may issue and sell shares of its STRC Stock having an aggregate offering price of up to $4.2 billion (the “STRC ATM Shares”) from time to time through sales agents under the STRC ATM Offering. As of July 31, 2025, the Company has not sold any STRC ATM Shares under the STRC ATM Offering and approximately $4.2 billion of STRC ATM Shares remained available for issuance and sale pursuant to the STRC ATM Offering.

Dividend on STRC Stock

As contemplated by the prospectus supplement for the initial public offering of STRC Stock, on July 31, 2025, the Company announced that its board of directors declared monthly cash dividends of $0.80 per share payable on the STRC Stock. The calculation of the monthly dividend takes into account the dividend accrued from, but excluding, July 29, 2025, the issuance date of the STRC Stock. Payment will be made on August 31, 2025 (or, if such date is not a business day, the next business day) to stockholders of record of the STRC Stock at the close of business on August 15, 2025.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Information

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For this purpose, any statements contained herein that are not statements of historical fact, including without limitation, certain statements regarding industry prospects and our results of operations or financial position, may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. The important factors discussed under “Part II. Item 1A. Risk Factors,” among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Such forward-looking statements represent management’s current expectations and are inherently uncertain. Investors are warned that actual results may differ from management’s expectations.

10-for-1 stock split

On August 7, 2024, we completed a 10-for-1 stock split of our class A and class B common stock. See Note 1, Summary of Significant Accounting Policies, to the Consolidated Financial Statements, for further information. As a result of the stock split, all applicable share and per share information presented within this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” has been retroactively adjusted to reflect the stock split for all periods presented.

Business Overview

Strategy is the world's first and largest Bitcoin Treasury Company. We are a publicly traded company that has adopted Bitcoin as our primary treasury reserve asset. By using proceeds from equity and debt financings, as well as cash flows from our operations, we strategically accumulate Bitcoin and advocate for its role as digital capital. Our treasury strategy is designed to provide investors varying degrees of economic exposure to Bitcoin by offering a range of securities, including equity and fixed income instruments.

In addition, we provide industry-leading AI-powered enterprise analytics software, advancing our vision of Intelligence Everywhere. We leverage our development capabilities to explore innovation in Bitcoin applications, integrating analytics expertise with our commitment to digital asset growth. We believe our combination of operational excellence, strategic Bitcoin reserve, and focus on technological innovation positions us as a leader in both the digital asset and enterprise analytics sectors, offering a unique opportunity for long-term value creation.

Our Bitcoin Strategy

Our bitcoin strategy generally involves from time to time, subject to market conditions, (i) issuing debt or equity securities or engaging in other capital raising transactions with the objective of using the proceeds to purchase bitcoin and (ii) acquiring bitcoin with our liquid assets that exceed working capital requirements. We intend to fund further bitcoin acquisitions primarily through issuances of common stock and a variety of fixed-income instruments, including debt, convertible notes and preferred stock.

We view our bitcoin holdings as long-term holdings and expect to continue to accumulate bitcoin. We have not set any specific target for the amount of bitcoin we seek to hold, and we will continue to monitor market conditions in determining whether to engage in additional financings to purchase additional bitcoin. This overall strategy also contemplates that we may (i) periodically sell bitcoin for general corporate purposes or in connection with strategies that generate tax benefits in accordance with applicable law, (ii) enter into additional capital raising transactions that are collateralized by our bitcoin holdings, and (iii) consider pursuing strategies to create income streams or otherwise generate funds using our bitcoin holdings.

Additionally, we periodically engage in advocacy and educational activities regarding the continued acceptance and value of Bitcoin as an open, secure protocol for an internet-native digital capital asset, and we leverage our software development capabilities to explore innovation in Bitcoin applications.

Under our Treasury Reserve Policy, our treasury reserve assets consist of:

•cash and cash equivalents and short-term investments (“Cash Assets”) held by us that exceed working capital requirements; and

•bitcoin held by us, with bitcoin serving as the primary treasury reserve asset on an ongoing basis, subject to market conditions and anticipated needs of the business for Cash Assets.

During 2024 and 2025, we used proceeds from various capital raising transactions to purchase bitcoin. As of June 30, 2025, we held an aggregate of approximately 597,325 bitcoins.

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Although we continue to initially record our bitcoin purchases at cost, upon adoption of ASU 2023-08 on January 1, 2025, any subsequent increases or decreases in fair value are recognized as incurred in the Consolidated Statements of Operations, and the fair value of our bitcoin is reflected within the Consolidated Balance Sheets each reporting period-end.

Since adopting ASU 2023-08, we are no longer required to account for our bitcoin under a cost-less-impairment accounting model and we no longer record a deferred tax asset related to bitcoin impairment losses. Instead, we establish a deferred tax liability if the market value of bitcoin at the reporting date is greater than the average cost basis of our bitcoin holdings at such reporting date, and any subsequent increases or decreases in the market value of bitcoin will increase or decrease the deferred tax liability.

The following table presents a roll-forward of our bitcoin holdings, including additional information related to our bitcoin purchases, bitcoin sales (if any), unrealized loss (gain) on digital assets, digital asset impairment losses, and cumulative effect adjustments within the respective periods:

	Source of Capital Used to Purchase Bitcoin	Digital Asset Original Cost Basis (in thousands)		Digital Asset Impairment Losses (in thousands)			Digital Asset Carrying Value (in thousands)			Approximate Number of Bitcoins Held		Approximate Average Purchase Price Per Bitcoin
Balance at June 30, 2024		$	8,328,626	$	(2,640,736	)	$	5,687,890			226,331	$	36,798
Digital asset purchases	(a)		1,575,073					1,575,073			25,889		60,839
Digital asset impairment losses					(412,084	)		(412,084	)
Balance at September 30, 2024		$	9,903,699	$	(3,052,820	)	$	6,850,879			252,220	$	39,266
Digital asset purchases	(b)		18,064,549					18,064,549			195,250		92,520
Digital asset impairment losses					(1,006,055	)		(1,006,055	)
Balance at December 31, 2024		$	27,968,248	$	(4,058,875	)	$	23,909,373			447,470	$	62,503
		Source of Capital Used to Purchase Bitcoin		Digital Asset Original Cost Basis (in thousands)			Digital Asset Carrying Value (in thousands)			Approximate Number of Bitcoins Held		Approximate Average Purchase Price Per Bitcoin
Balance at December 31, 2024 (before adoption of ASU 2023-08)				$	27,968,248		$	23,909,373			447,470	$	62,503
Cumulative effect upon adoption of ASU 2023-08								17,881,048
Balance immediately following adoption of ASU 2023-08				$	27,968,248		$	41,790,421			447,470	$	62,503
Digital asset purchases		(c)			7,661,663			7,661,663			80,715		94,922
Unrealized loss on digital assets								(5,906,005	)
Balance at March 31, 2025				$	35,629,911		$	43,546,079			528,185	$	67,457
Digital asset purchases		(d)			6,769,205			6,769,205			69,140		97,906
Unrealized gain on digital assets								14,047,514
Balance at June 30, 2025				$	42,399,116		$	64,362,798			597,325	$	70,982

(a)In the third quarter of 2024, we purchased bitcoin using $1.11 billion of the net proceeds from sales of class A common stock under our at-the-market offering program for our class A common stock, $458.2 million of the net proceeds from our issuance of the 2028 Convertible Notes, and Excess Cash.

(b)In the fourth quarter of 2024, we purchased bitcoin using $15.09 billion of the net proceeds from sales of class A common stock under our at-the-market offering program for our class A common stock, and $2.97 billion of the net proceeds from our issuance of the 2029 Convertible Notes.

(c)In the first quarter of 2025, we purchased bitcoin using $4.37 billion of the net proceeds from sales of our class A common stock under our at-the-market offering program for our class A common stock, $1.99 billion of the net proceeds from our issuance of the 2030B Convertible Notes, $593.7 million of the aggregate net proceeds from the initial public offering of our STRK Stock and sales of STRK Stock under the at-the-market offering program for our STRK Stock, and $710.0 million of the net proceeds from the issuance of our STRF Stock in the initial public offering of STRF Stock.

(d)In the second quarter of 2025, we purchased bitcoin using $5.19 billion of the net proceeds from sales under our at-the-market offering program for our class A common stock, $979.7 million of the net proceeds from our initial public offering of STRD Stock, $163.0 million of the net proceeds from the sales under the at-the-market offering program for our STRF Stock, and $438.0 million of the net proceeds from the sales under the at-the-market offering program for our STRK Stock.

Excess Cash refers to cash in excess of the minimum Cash Assets that we are required to hold under our Treasury Reserve Policy, which may include cash generated by operating activities and cash from the proceeds of financing activities.

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The following table shows the approximate number of bitcoins held at the end of each respective period, as well as market value calculations of our bitcoin holdings based on the lowest, highest, and ending market prices of one bitcoin on the Coinbase exchange (our principal market) for each respective quarter, as further defined below:

	Approximate Number of Bitcoins Held at End of Quarter		Lowest Market Price Per Bitcoin During Quarter (a)		Market Value of Bitcoin Held at End of Quarter Using Lowest Market Price (in thousands) (b)		Highest Market Price Per Bitcoin During Quarter (c)		Market Value of Bitcoin Held at End of Quarter Using Highest Market Price (in thousands) (d)		Market Price Per Bitcoin at End of Quarter (e)		Market Value of Bitcoin Held at End of Quarter Using Ending Market Price (in thousands) (f)
June 30, 2024		226,331	$	56,500.00	$	12,787,702	$	72,777.00	$	16,471,691	$	61,926.69	$	14,015,930
September 30, 2024		252,220	$	49,050.01	$	12,371,394	$	70,000.00	$	17,655,400	$	63,462.97	$	16,006,630
December 31, 2024		447,470	$	58,863.90	$	26,339,829	$	108,388.88	$	48,500,772	$	93,390.21	$	41,789,317
March 31, 2025		528,185	$	76,555.00	$	40,435,222	$	109,358.01	$	57,761,287	$	82,444.71	$	43,546,079
June 30, 2025		597,325	$	74,420.69	$	44,453,357	$	112,000.00	$	66,900,427	$	107,751.68	$	64,362,798

(a)The "Lowest Market Price Per Bitcoin During Quarter" represents the lowest market price for one bitcoin reported on the Coinbase exchange during the respective quarter, without regard to when we purchased any of our bitcoin.

(b)The "Market Value of Bitcoin Held at End of Quarter Using Lowest Market Price" represents a mathematical calculation consisting of the lowest market price for one bitcoin reported on the Coinbase exchange during the respective quarter multiplied by the number of bitcoins we held at the end of the applicable period.

(c)The "Highest Market Price Per Bitcoin During Quarter" represents the highest market price for one bitcoin reported on the Coinbase exchange during the respective quarter, without regard to when we purchased any of our bitcoin.

(d)The "Market Value of Bitcoin Held at End of Quarter Using Highest Market Price" represents a mathematical calculation consisting of the highest market price for one bitcoin reported on the Coinbase exchange during the respective quarter multiplied by the number of bitcoins we held at the end of the applicable period.

(e)The "Market Price Per Bitcoin at End of Quarter" represents the market price of one bitcoin on the Coinbase exchange at 4:00 p.m. Eastern Time on the last day of the respective quarter.

(f)The "Market Value of Bitcoin Held at End of Quarter Using Ending Market Price" represents a mathematical calculation consisting of the market price of one bitcoin on the Coinbase exchange at 4:00 p.m. Eastern Time on the last day of the respective quarter multiplied by the number of bitcoins we held at the end of the applicable period.

The amounts reported as “Market Value” in the above table represent only a mathematical calculation consisting of the price for one bitcoin reported on the Coinbase exchange (our principal market) in each scenario defined above multiplied by the number of bitcoins held by us at the end of the applicable period. Bitcoin and bitcoin markets may be subject to manipulation and the spot price of bitcoin may be subject to fraud and manipulation. Accordingly, the Market Value amounts reported above may not accurately represent fair market value, and the actual fair market value of our bitcoin may be different from such amounts and such deviation may be material. Moreover, (i) the bitcoin market historically has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks that are, or may be, inherent in its entirely electronic, virtual form and decentralized network and (ii) we may not be able to sell our bitcoins at the Market Value amounts indicated above, at the market price as reported on the Coinbase exchange (our principal market) on the date of sale, or at all.

Unrealized (gains) losses on digital assets and digital asset impairment losses have significantly contributed to our results of operations. During the three and six months ended June 30, 2025, the unrealized gain on digital assets of $14.048 billion and $8.14 billion, respectively, effectively offset our operating expenses, representing 100.7% and 102.3%, of our operating expenses, respectively. During the three and six months ended June 30, 2024, digital asset impairment losses of $180.1 million and $371.7 million, respectively, represented 64.1% and 65.2% of our operating expenses, respectively.

As of July 31, 2025, we held approximately 628,791 bitcoins that were acquired at an aggregate purchase price of $46.08 billion and an average purchase price of approximately $73,277 per bitcoin, inclusive of fees and expenses. As of July 31, 2025, at 4:00 p.m. Eastern Time, the market price of one bitcoin reported on the Coinbase exchange was $116,760.

Enterprise Analytics Software Strategy

Strategy is a pioneer in AI-powered intelligence solutions delivering a comprehensive portfolio that addresses a wide spectrum of enterprise data challenges. We provide software and services designed to transform complex, fragmented data environments into unified

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reliable information ecosystems that drive insight and action across organizations worldwide. Our vision is to drive growth and competitive advantage for our customers by delivering Intelligence Everywhere™.

Strategy One™, our cloud-native analytics platform, powers some of the largest business intelligence deployments in the world. It delivers visualization, reporting, and embedded analytics capabilities across retail, banking, technology, manufacturing, insurance, consulting, healthcare, telecommunications, and the public sector. Complementing this, Strategy Mosaic™ is a universal intelligence layer that enables organizations to achieve a single source of truth across their data. It provides enterprises with consistent definitions and governance across data sources, regardless of where that data resides or which tools access it. AI-assisted data modeling hastens data product creation, while its intelligent architecture promotes accelerated performance for all workloads.

Integral to the Strategy portfolio are generative AI capabilities that are designed to automate and accelerate the deployment of AI-enabled applications across the enterprise. By making advanced analytics accessible through conversational AI, we provide non-technical users with timely, actionable insights for decision-making.

The AI and analytics markets are highly competitive and subject to rapidly changing technology and market conditions. Our ability to compete successfully depends on a number of factors within and outside of our control. Some of these factors include software quality, performance and reliability; the quality of our service and support teams; marketing and prospecting effectiveness, the ability to incorporate artificial intelligence and other technically advanced features; and our ability to differentiate our products.

Operating Highlights

The following table sets forth certain operating highlights (in thousands) for the three and six months ended June 30, 2025 and 2024:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2025			2024			2025			2024
Revenues
Product licenses	$	7,177		$	9,286		$	14,447		$	22,224
Subscription services		40,824			24,080			77,927			47,046
Total product licenses and subscription services		48,001			33,366			92,374			69,270
Product support		52,081			61,740			104,610			124,425
Other services		14,406			16,336			28,570			32,993
Total revenues		114,488			111,442			225,554			226,688
Cost of revenues
Product licenses		1,169			794			2,133			1,361
Subscription services		15,906			9,560			30,335			18,164
Total product licenses and subscription services		17,075			10,354			32,468			19,525
Product support		7,291			8,193			14,645			16,740
Other services		11,384			12,388			22,608			24,685
Total cost of revenues		35,750			30,935			69,721			60,950
Gross profit		78,738			80,507			155,833			165,738
Operating expenses
Sales and marketing		33,691			34,251			61,223			67,702
Research and development		24,071			30,311			48,494			59,494
General and administrative		36,500			36,129			77,047			70,795
Unrealized gain on digital assets		(14,047,514	)		0			(8,141,509	)		0
Digital asset impairment losses		0			180,090			0			371,723
Total operating expenses		(13,953,252	)		280,781			(7,954,745	)		569,714
Income (loss) from operations	$	14,031,990		$	(200,274	)	$	8,110,578		$	(403,976	)

Prior to our adoption of ASU 2023-08 on January 1, 2025, we incurred significant impairment losses on our digital assets, and we recognized gains upon sale of our digital assets, which were presented net of any impairment losses within operating expenses. However, the accounting for our digital assets changed upon our adoption of ASU 2023-08. See Note 1, Summary of Significant Accounting Policies to the Consolidated Financial Statements for further information. As a result, fluctuations in the price of bitcoin and fair value changes associated therewith have had and will have a significant impact on our future operating results.

In addition, we base our operating expense budgets on expected revenue trends and strategic objectives. Many of our expenses, such as interest expense on debt, declared dividends on our STRK Stock, STRF Stock, STRD Stock and STRC Stock (hereinafter collectively

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referred to as “Preferred Stock”), tax liabilities, office leases and certain personnel costs, are relatively fixed. We may be unable to adjust spending quickly enough to offset any unexpected shortfall in our cash flow. Accordingly, we may be required to take actions to pay expenses, such as selling bitcoin or using proceeds from equity or debt financings, some of which could significantly impact our operating results in any period. We therefore believe that period-to-period comparisons of our operating results may not be a good indication of our future performance.

Employees

As of June 30, 2025, we had a total of 1,512 employees, of whom 469 were based in the United States and 1,043 were based internationally. The following table summarizes employee headcount as of the dates indicated:

	June 30,		December 31,		June 30,
	2025		2024		2024
Subscription services		188		95		99
Product support		66		163		197
Consulting		253		275		350
Education		14		11		11
Sales and marketing		288		295		349
Research and development		483		498		625
General and administrative		220		197		208
Total headcount		1,512		1,534		1,839

Share-based Compensation Expense

As discussed in Note 8, Share-based Compensation, to the Consolidated Financial Statements, we have awarded stock options to purchase shares of our class A common stock, restricted stock units, performance stock units, and certain other stock-based awards under our Stock Incentive Plans. Each restricted stock unit and performance stock unit represents a contingent right to receive a share of our class A common stock upon the satisfaction of applicable vesting requirements. We also provide opportunities for eligible employees to purchase shares of our class A common stock under our 2021 ESPP. Share-based compensation expense (in thousands) from these awards was recognized in the following cost of revenues and operating expense line items for the periods indicated:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Cost of subscription services revenues	$	331	$	119	$	434	$	189
Cost of product support revenues		298		1,067		698		1,985
Cost of consulting revenues		473		496		866		881
Cost of education revenues		48		36		87		62
Sales and marketing		2,124		3,865		3,289		8,566
Research and development		2,096		4,014		1,372		7,117
General and administrative		10,372		11,024		20,815		19,612
Total share-based compensation expense	$	15,742	$	20,621	$	27,561	$	38,412

The $4.9 million decrease in share-based compensation expense during the three months ended June 30, 2025, as compared to the same period in the prior year, was primarily due to the forfeiture of certain stock awards and certain awards that became fully vested, partially offset by the grant of additional awards under the Stock Incentive Plans. The $10.9 million decrease in share-based compensation expense during the six months ended June 30, 2025, as compared to the same period in the prior year, was primarily due to the forfeiture of certain stock awards and certain awards that became fully vested, partially offset by the grant of additional awards under the Stock Incentive Plans. As of June 30, 2025, we estimated that an aggregate of approximately $126.2 million of additional share-based compensation expense associated with the Stock Incentive Plans and the 2021 ESPP will be recognized over a remaining weighted average period of 2.7 years.

Critical Accounting Estimates

Our discussion and analysis of our financial condition and results of operations are based on our Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of our Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and equity, the disclosure of contingent assets and liabilities at the

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date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results and outcomes could differ from these estimates and assumptions.

Critical accounting estimates involve a significant level of estimation uncertainty and are estimates that have had or are reasonably likely to have a material impact on our financial condition or results of operations. We consider certain estimates and judgments related to revenue recognition to be critical accounting estimates for us, as discussed under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. There have been no significant changes in such estimates and judgments since December 31, 2024.

Results of Operations

Comparison of the three and six months ended June 30, 2025 and 2024

Revenues

Except as otherwise indicated herein, the term “domestic” refers to operations in the United States and Canada and the term “international” refers to operations outside of the United States and Canada.

Product licenses and subscription services revenues. The following table sets forth product licenses and subscription services revenues (in thousands) and related percentage changes for the periods indicated:

	Three Months Ended							Six Months Ended
	June 30,				%			June 30,				%
	2025		2024		Change			2025		2024		Change
Product Licenses and Subscription Services Revenues:
Product Licenses
Domestic	$	5,059	$	4,804		5.3	%	$	8,512	$	9,811		-13.2	%
International		2,118		4,482		-52.7	%		5,935		12,413		-52.2	%
Total product licenses revenues		7,177		9,286		-22.7	%		14,447		22,224		-35.0	%
Subscription Services
Domestic		23,653		14,916		58.6	%		45,303		29,508		53.5	%
International		17,171		9,164		87.4	%		32,624		17,538		86.0	%
Total subscription services revenues		40,824		24,080		69.5	%		77,927		47,046		65.6	%
Total product licenses and subscription services revenues	$	48,001	$	33,366		43.9	%	$	92,374	$	69,270		33.4	%

Product licenses revenues. Product licenses revenues decreased $2.1 million and $7.8 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in the prior year, primarily due to an overall decrease in the volume and average size of deals. We expect our product licenses revenues to continue to experience declines in future periods as we continue to promote our cloud offering to new and existing customers.

Subscription services revenues. Subscription services revenues are derived from our Cloud subscription service and are recognized ratably over the service period in the contract. Subscription services revenues increased $16.7 million and $30.9 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in the prior year, primarily due to conversions to cloud-based subscriptions from existing on-premises customers, a net increase in the use of subscription services by existing customers, and sales contracts with new customers. We expect our subscription services revenues to continue to grow in future periods as we continue to promote our cloud offering to new and existing customers.

Product support revenues. The following table sets forth product support revenues (in thousands) and related percentage changes for the periods indicated:

	Three Months Ended							Six Months Ended
	June 30,				%			June 30,				%
	2025		2024		Change			2025		2024		Change
Product Support Revenues:
Domestic	$	29,946	$	37,049		-19.2	%	$	61,721	$	74,457		-17.1	%
International		22,135		24,691		-10.4	%		42,889		49,968		-14.2	%
Total product support revenues	$	52,081	$	61,740		-15.6	%	$	104,610	$	124,425		-15.9	%

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Product support revenues are derived from providing technical software support and software updates and upgrades to customers. Product support revenues are recognized ratably over the term of the contract, which is generally one year. Product support revenues decreased $9.7 million and $19.8 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in the prior year, primarily due to existing customers converting from on-premises product licenses with support contracts to our Cloud subscription services offerings and non-renewals of existing support contracts. We expect our product support revenues to experience declines in future periods as we continue to promote our cloud offering to new and existing customers.

Other services revenues. The following table sets forth other services revenues (in thousands) and related percentage changes for the periods indicated:

	Three Months Ended							Six Months Ended
	June 30,				%			June 30,			%
	2025		2024		Change			2025		2024	Change
Other Services Revenues:
Consulting
Domestic	$	6,561	$	6,912		-5.1	%	$	13,020